Every week we bring you the world’s biggest business, currency, and travel stories. This week: The Liberals run a deficit, but it is smaller than expected; Canada adds almost 70,000 jobs; US employment ticks up to 5% despite over 100,000 jobs added; and the pound falls on a flash crash.
In the Red
The federal government posted a $1 billion deficit in 2015-2016, a year in which both Stephen Harper’s Conservatives and Justin Trudeau’s Liberals led the country. The Liberals had predicted a larger $5.4 billion deficit back in March, but higher personal tax rates introduced by the Liberal’s offset the deficit. The Tories had ran budget deficits from 2008 to 2014, but had posted a surplus in 2015, and had predicted another surplus this year. However the fall in oil prices means that this year’s economic output was far below that which had been predicted by the Tories.
More jobs added than expected
Canada added 67,000 jobs in September, exceeding expectations but failing to affect the unemployment rate which has remained at 7%. The service industry added 56,000 jobs, while construction and manufacturing added 6000.
US adds jobs
The US added 156,000 jobs in September, below the yearly average of 178,000. The unemployment rate rose slightly from 4.9% to 5%. Despite this, the economy remains strong and poised for an interest rate hike by the Federal Reserve. The Fed last raised rates in December but will likely wait until after the November Presidential election to raise rates again.
The British pound had its worst day since the Brexit vote in June of this year in what has been described as a ‘flash crash’. The pound fell from 1.26 down to 1.1789 in just two minutes. The fall may have been caused by faulty automated trading formulas or human error (a ‘fat finger’ accidently selling more currency than intended), but the exact cause remains unclear and the Bank of England is launching an investigation. At the time of writing the pound had almost completely recovered.
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