Remarks: Canada, The Americas and the Global Economy: Investing in an interconnected world - October 14, 2020
The annual Global Macro Conference sponsored and organized by the Official Monetary and Financial Institutions Forum (OMFIF) and Scotiabank’s Global Capital Markets - October 13-14, 2020
My remarks on the Oct. 14 Pension CIO panel follow.*
April’s 14.7 percent unemployment rate, announced by the Labor Department last Friday, is awful by any standard. The official tally shows that unemployment increased by 15,938,000 people last month—to 23,078,000 overall—resulting in the highest jobless rate since the Great Depression.
2019 ended on a mostly consensus note. The private payroll jobs trend remained clearly healthy. The jobless rate set a new cycle low (marginally). Aggregate hours worked came in below expectations but, with productivity gains and a surge in net exports, FMI is still looking for +2.5% or so real GDP growth for 19Q4.
Chicago and Mexico are inextricably intertwined on multiple levels. The Midwest has structural similarities to the Mexican economy, especially in terms of the dominance of its manufacturing sector. Chicago has the largest Mexican-American population in the country outside of Los Angeles, more than three quarters of a million people. We even share a connection in the natural world. This is the season when a kaleidoscope of Monarch butterflies swarm through Chicago, on their way to spend the winter in Mexico.
The rout in oil markets continued in November, the markets worst month in 10 years. Oil prices West Texas Intermediate (WTI) down by 22%, to their lowest level in 13 months. In the past few months, oil markets have moved from balanced to oversupply, which sent oil prices (Brent) crashing by one-third from a high of $86/bbl at the beginning of October to under $60/bbl at the end of November.