 Welcome to Mind Your Business ! Consider this your weekly guide to understanding what’s happening in the worlds of economics, business and finance. By Peter Armstrong | | |  | Jobs numbers this week should cast a gloomy light on the economy. (Andrey_Popov/Shutterstock) | | | How we feel about the economy matters more than a lot of us think.
If you believe the economy is headed for a rough patch, you may choose to scale back some purchases or decide against that family vacation to B.C.
If you're running a business and know your customers are worried and trying to squirrel some money away, you're less likely to invest or hire.
So, the numbers we get have an impact beyond what they tell us about what happened last month or last quarter. They inform how we feel about the economy,
And how we feel can shape and influence the economic data.
This week's jobs numbers are a case in point.
Economists believe Canadian employers added around 17,500 jobs last month. But due to population growth, the unemployment rate is likely to hold steady around 6.1 per cent. | | |  | | | That chart shows how the unemployment rate has inched up from the lows we saw after COVID-19 restrictions.
The labour market is clearly weakening. And that will erode confidence, for sure.
But that weakening is one of the things the Bank of Canada has been waiting for.
"The message to Canadians is, we are getting closer. We are seeing what we need to see and we just need to be confident that it will be sustained," said Bank of Canada governor Tiff Macklem during an appearance before the House of Commons finance committee last week.
But Macklem is still worried about underlying inflation pressures. Among those pressures: wage growth.
There are a handful of economic indicators used to measure wage growth. Payroll data shows wage growth has moderated. But the Labour Force Survey (which comes out this Friday) has painted a different picture.
"The Bank of Canada will be watching for signs of whether softening labour markets are pushing wage growth lower. Average hourly earnings were still more than 5% above year-ago levels in March, but other indicators of wage growth in Canada have been more mixed," wrote RBC economists Nathan Janzen and Abbey Xu in a note to clients.
If those wage growth numbers start to align, that will be one more reason to believe the Bank of Canada is getting ready to lower interest rates.
Meanwhile in the U.S., a once-roaring economy is beginning to lose steam. Jobs numbers last week cooled considerably.
And confidence is expected to continue to fall.
We will get the latest version of this chart of consumer sentiment on Friday. | | |  | | | I love that chart. And I'm excited to see what this week's update will show.
It shows clearly how less enthusiastic we are (or how less enthusiastic Americans are, but I think this tracks in Canada as well) since the onset of the pandemic.
Since about mid-2022, consumer confidence has surged. But it started to turn last month. It's expected to fall further from here.
How will that shape the economy heading into the summer and what was expected to be the beginning of a turnaround?
And what will it take for consumers to regain that confidence?
As always, send me a note.
My email is: peterarmstrong@cbc.ca | | |  | | Canadian jobs numbers for April are out on Friday. Economists believe the economy added about 17,500 jobs last month. | | | | | | One of the most important measures of consumer confidence in the U.S. will be released this week. The University of Michigan Consumer Sentiment Index comes out on Friday. | | | | | | The Bank of Canada will release its Financial System Review on Thursday. The report looks into the state of the broader financial system in Canada. | | | | | Three things to read, watch and listen to this week | | |  | What the movie Civil War tells us about economic risk in a divided country. (A24) | | | 1. Civil War's economics | | | The movie Civil War is storming the box office.
Collider is reporting the cumulative global gross now stands at $91.6 million US.
There are plenty of reviews about. You can read those here and here.
But this week, I wanted to flag this amazing episode of the podcast Ones and Tooze.
The podcast is hosted by Foreign Policy economics columnist Adam Tooze and FP deputy editor Cameron Abadi.
Regular readers will know I'm a huge fan of Tooze and how he sees the economy and the bigger picture.
In this episode, he digs into the economic implications of a real civil war in the United States.
"It is an apocalyptic scenario we are envisioning here," Tooze cautioned.
But he points out that even in that scenario, the resilience of the U.S. economy is a remarkable thing.
Tooze points out that California and Texas have economies roughly the same size as some European countries.
“America is as rich as it is in large part because large parts of the country do have a really, genuinely, astonishingly favourable mix of resources," he said.
But if some states split away from the union, how easily could the remaining rump continue to fight the breakaway republics? More to the point, how could it afford to fight?
Tooze gets into tax policy, the history of American conflicts and finds some interesting parallels in some of today's wars.
As usual, he offers insight and and an understanding that aren't always on full display when discussing international affairs.
My favourite bit comes at the end, when Abadi asks Tooze to cast his thoughts past the fictional war and imagine a fictional peace.
"Under what conditions could it be conceivable that the single market that is the United States could be recreated?" he asks.
Tooze leans on two historical precedents. Neither of them are particularly encouraging.
On the one hand, he says a collapse of the American market would be something akin to the fall of the Roman Empire, which took a thousand years before it was recomposed.
Or, he says, another more modest example would be the monarchy of Charles V in the early 1500s. It disintegrated with the Reformation and the eventual 30 Years War.
"If that's the cataclysm we're talking about, then it's several centuries before things grow back together again by way of the free trade politics of the 18th and 19th centuries and the horrific wars of the 20th and then the [European] reunification," said Tooze.
The whole episode is great and if you have found yourself wondering what may happen if the events in Civil War actually unfolded, then this is the podcast for you.
Check out this episode of Ones and Tooze here.
Watch the trailer for Civil War here. | | | Jamie Dimon's vantage point | | | I like these sorts of interviews: famous, powerful people with a unique view of the economy and their basic sense of where things are and where things are headed.
In this case, Wall Street Journal editor-in-chief Emma Tucker sits down with Jamie Dimon, the CEO of JPMorgan Chase, to discuss his latest letter to shareholders.
Tucker says her biggest takeaway is that Dimon has a very clear sense of what's good for America, what's good for the economy and what's good for JP Morgan.
She asks him what he sees as the biggest threat to that vision.
"Every year when I write that letter, I try to think about what are the most important things and I would add to that the free Western world, because that's what worries me the most," he said.
Dimon says his first take on the economy is that the American consumer is in "pretty good shape" right now.
"Unemployment's under four per cent, it's been there for two years. Housing prices are up, stock prices are up, jobs are plentiful and wages are finally going up at the low end," he said.
On the other hand, he says much of that progress has been driven by government spending driving the deficit to six per cent of GDP, almost $2 trillion US.
He says he's worried there will be more volatility in the economy in the coming months, in spite of some rosy forecasts.
"You can have that soft landing. I'm a little worried it may not be so soft and inflation may not go away quite (as quickly) as people expect," he told Tucker.
He also talks about overcoming some serious personal health challenges, his morning routine and avoids questions on the upcoming U.S. presidential election.
Watch Jamie Dimon's interview here. | | | 3. Tech podcasts | | | New podcast alert!
I have been remiss in my recommendations. I review a lot of shows here, but someone asked me why I don't write about more tech podcasts.
I don't have a good answer, but a new podcast out this week offers me an opportunity to highlight a few I think are great.
The new one comes via The Globe and Mail. It's called Machines Like Us, hosted by Taylor Owen.
Owen is the Beaverbrook chair in media, ethics and communications and the founding director of The Centre for Media, Technology and Democracy at McGill University.
The new podcast drops on Tuesday. It describes itself as a technology show about people:
"Technologies that were once the realm of science fiction will become our reality: robot best friends, bespoke gene editing, brain implants that make us smarter," says the podcast's website.
I'm really looking forward to that.
It will join some fantastic programs that offer smart takes, witty banter and good company.
One of my favourites is the Betakit Podcast.
Whenever I get confused about some new technology or trend or investment, I tend to call Douglas Soltys, host of the show and editor-in-chief of the tech publication Betakit.
In this most recent episode, Soltys convenes a fireside conversation with two of Canada's most successful entrepreneurs.
Wealthsimple's CEO Michael Katchen and Koho CEO Daniel Eberhard spoke with Soltys at the INNOVATEwest conference last month.
Soltys asked them about what he called cascading crises in productivity, competition and entrepreneurship.
"I think that building things is a very noble pursuit. It doesn't matter if you succeed or fail. It matters whether we collectively create a collective culture of building in this country," said Eberhard.
Add to the pile great standards like How I Built This from NPR and The VergeCast hosted by Nilay Patel and, of course, Pivot hosted by Recode’s Kara Swisher and NYU professor Scott Galloway.
It's a golden age of podcasts and this list just barely scratches the surface.
What tech podcasts are you listening to?
Send me your recommendations here.
Check out the trailer for Machines Like Us here.
Check out the Betakit Podcast here.
Check out How I Built This here.
Check out The Vergecast here.
Check out Pivot here. | | | How the economy looks beyond Bay Street | | | Fading Fed hopes | | | Here in Canada, just about the only question I get these days revolves around when the Bank of Canada is going to start cutting interest rates.
The latest betting is that rates will start to come down in June (though July remains a firm possibility, too).
That's a long ways from the expectations we had at the beginning of the year. Back then, market-watchers believed rate cuts would come in March or April.
In the United States, investors have been pushing those expectations back even further. | | |  | Investors believe rate cuts may not come until November and they believe there's a growing chance the U.S. may actually see more rate hikes this year.
That opens a whole new set of questions about what that may mean for Canadian interest rates, the Canadian dollar and even the Canadian economy.
But for now, markets here still believe borrowing rates will start to normalize this summer. | | | Share this newsletter | | or subscribe if this was
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