Business

By Julie Gordon

OTTAWA (Reuters) – More than a year after the Great Resignation took hold in the United States, Canada is grappling with its own greyer version: The Great Retirement.

Canada’s labor force grew in August, but it fell the previous two months and remains smaller than before the summer as tens of thousands of people simply stopped working. Much of this can be chalked up to more Canadians than ever retiring, said Statistics Canada.

It is not just the 65-and-over crowd packing up their offices and hanging up their tool belts. A record number of Canadians aged 55-64 are now reporting they retired in the last 12 months, Statscan data shows. (Graphic: https://tmsnrt.rs/3RVXvNM)

Graphic: Canadians are retiring in droves – https://graphics.reuters.com/CANADA-ECONOMY/EMPLOYMENT/lgpdwdxkovo/chart.png

That is hastening a mass exodus of Canada’s most highly skilled workers, leaving businesses scrambling, helping push wages sharply higher and threatening to further drag down the country’s sagging productivity, economists say.

“We knew from a long time ago that this wave was coming, that we would get into this moment,” said Jimmy Jean, chief economist at Desjardins Group. “And it’s only going to intensify in the coming years.”

“The risk you have, and in some sectors you’re already seeing it, is that people are leaving without there being enough younger workers to take over. So there’s a loss of human capital and knowledge.”

During the pandemic, retirements fell as many Canadians decided to stay in their jobs longer. With restrictions now lifted, many are rushing to make up for lost time, choosing to travel and spend more time with family.

Their departures are shrinking the labor force, which could weigh on economic growth at a time when the central bank is aggressively hiking interest rates to counter spiking inflation, fanning fears that the economy will fall into recession.

Canada – which has ramped up immigration to help drive economic growth – has the largest working-age population, as a percentage of the overall population, in the G7, but at the same time its labor force has never been older, according to Statscan. One in five workers in Canada is 55 or older. (Graphic: https://tmsnrt.rs/3RTcMyJ)

Graphic: Canada’s labor force is rapidly aging – https://graphics.reuters.com/CANADA-ECONOMY/EMPLOYMENT2/xmvjoajkypr/chart.png

There were 307,000 Canadians in August who had left their job in order to retire at some point in the last year, up 31.8% from one year earlier and 12.5% higher than in August 2019, before the onset of the pandemic, Statscan said.

Adding to the problem, more than 620,000 Canadians entered the 65+ age category during the pandemic, a 9.7% increase in that population group. Despite three straight months of job losses, job vacancies and postings remain well above pre-pandemic levels.

NURSES AND TRUCKERS

The retirement problem is particularly dire in skilled fields like trades and nursing. Since May, Canada has lost 34,400 jobs in healthcare even as a record number of nurses reported working overtime hours.

Those were not jobs being cut, but rather people retiring, said Cathryn Hoy, president of the Ontario Nurses’ Association.

    “It’s a huge problem right now, because we’ve had so many that have retired unexpectedly,” she said, citing the pandemic, working conditions and a wage dispute with Canada’s largest province.

The transportation industry is also grappling with a severe worker shortage, both because of the pandemic-driven frenzy for more goods and as the workforce ages.

“More and more drivers are aging and therefore retiring or contemplating different lifestyle,” said Tony Reeder, owner of Trans-Canada College, a career college that trains transport truck drivers.

At the same time, demand is booming from trucking companies, many of which take on student drivers for on-the-job training courses and then hire them outright as soon as they are fully licensed, said Reeder.

“Without trucks and people to drive trucks … goods will sit at ports and in warehouses as opposed to getting to the destination where they can be consumed,” he said.

(Reporting by Julie Gordon in Ottawa; Editing by Steve Scherer and Matthew Lewis)

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POKROVSK, Ukraine (AP) — Through the debris-strewn rooms of the bomb-blasted house, the incessant ringing of a phone punctuates the crunch of broken glass splintering underfoot as police lay out a body bag.

But the call will never be answered. The phone’s owner crouches lifeless on the floor of his home, in a front room where the explosion from a missile — one of several to hit this eastern Ukrainian town — found him.

The missiles that rained down on Pokrovsk Saturday night and into the early hours of Sunday were part of a barrage of attacks on towns in eastern Ukraine’s Donetsk region that left at least 10 people dead Saturday, according to Donetsk governor Pavlo Kyrylenko. They came as Ukraine pressed forward with a counteroffensive just to the north in the Kharkiv region, pushing Russian forces into a retreat from key areas.

Six of the dead were in Pokrovsk, mayor Ruslan Trebushkin said in a message posted on Telegram. The industrial town about 40 kilometers (25 miles) from the front line had been hit twice before by missiles, in May and July, but never before by so many in one night. A flash illuminated the night sky as a detonation sounded out across the town in the second of six explosions. An ambulance raced through the darkened streets, and flames rose from a fire triggered by the missile strikes.

At least three of those who died were killed when one of the missiles struck between a row of small houses and nearby train tracks, collapsing part of a nearby abandoned building, leaving one home burnt to the ground and severely damaging several more.

Oleksandr Zaitsev, 67, stood quietly outside his friend’s house as the police arrived. His friend’s wife had been calling her husband nonstop since the strike, he said, but nobody was picking up.

The house’s windows were shattered, the walls were pockmarked from shrapnel, and the front door blown off its hinges. Inside, the police gently rolled Zaitsev’s friend into a black body bag.

Next door, Yevhenia Butkova, 47, stood stunned in the center of her living room, trying to calm her two agitated pet dogs. Blood stained the sofa where she and her husband had been watching television when the first missile struck. On Sunday morning, he was recovering in a hospital after doctors removed shards of glass from his wounds, she said.

Chunks of debris from the ceiling littered the floor throughout the house, whose entrance was reduced to a jumble of splintered wood, plaster, glass and brick. One of the plywood boards the couple had put over their windows for protection had been blown clean across the garden. But a combination of that and the plastic they had put over the glass probably saved their lives, Butkova said.

“It was all quiet in Pokrovsk, this was very unexpected,” she said. “It was horrible.”

Further down the row of single-story houses, an elderly couple swept rubble and glass from their small porch, dried blood still streaking their faces.

Mariia Trutko, 85, and her husband Oleksii Maksymenko, 75, had been sleeping when they were jolted awake by the blast.

“I can’t hear anything without my hearing aid, and then it hit so hard that I heard,” said Maksymenko, a retired coal miner. “Everything flew. … I started bleeding, so we got up to see what that was, and then there was another one: boom!”

Their bed was littered with jagged shards of glass and plaster from the roof that covered them both, Trutko said. A large, square piece of glass lay on the pillow, and spots of blood stained the floor.

“Oh my God, we could never imagine going through something like this at this old age,” Maksymenko said.

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Follow the AP’s coverage of the war at https://apnews.com/hub/russia-ukraine

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The last operating reactor at Ukraine’s Zaporizhzhia nuclear power plant, which is Europe’s largest, was shut down Sunday to reduce the threat of a radiation disaster amid the continuing fighting.

The move became possible after the plant was reconnected to Ukraine’s power grid.

Here is a look at the situation at the plant after 200 days of Russia’s war:

RADIATION THREAT

Fighting near the plant has fueled fears of a disaster like the one at Chernobyl in 1986, where a reactor exploded and spewed deadly radiation, contaminating a vast area in the world’s worst nuclear catastrophe.

The plant, one of the 10 biggest atomic power stations in the world, has been occupied by Russian forces since the opening days of the war. Ukraine and Russia have traded blame for shelling around the plant, which hasn’t damaged its six reactors or spent nuclear fuel storage, but has repeatedly struck power lines and some auxiliary equipment.

While Zaporizhzhia’s reactors are protected by a reinforced shelter that could withstand an errant shell or rocket, a disruption in the electrical supply could knock out cooling systems essential for the reactors’ safety. Emergency diesel generators can be unreliable.

After the facility was knocked off transmission lines Sept. 5 following a fire caused by shelling, only one reactor remained operational to power cooling systems and other crucial equipment in so-called island mode.

RISKY ‘ISLAND MODE’

Functioning in “island mode” supplies power for the residual heat removal of the reactor cores and the spent fuel pools.

Experts say it is very unreliable. They point out that if the diesel generators fail, a core meltdown could occur within hours.

If the reactor is already turned off, the risk depends on the time since shutdown. The less time has passed, the more cooling is required.

While the pool containing Zaphorizhzha’s spent fuel is located inside the plant’s containment area, a serious reactor mishap would likely affect the pool as well.

WHAT IS HAPPENING NOW?

Ukraine’s nuclear operator Energoatom said the restoration of one of power lines linking the plant to the country’s power grid allowed engineers to shut down its last operating reactor.

Energoatom said the move was necessary to prevent a situation when the plant would have to rely exclusively on emergency diesel generators to keep the reactors cool and prevent a nuclear meltdown. The company’s chief told The Associated Press on Thursday that the plant only has diesel fuel for 10 days.

The International Atomic Energy Agency, the U.N. nuclear watchdog which has two experts at the plant, confirmed to the AP on Sunday that its last reactor was shut down after external power had been restored.

IAEA Director-General Rafael Grossi has called for a safe zone around the plant to avert a disaster but the fighting has continued.

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Follow the AP’s coverage of the war at https://apnews.com/hub/russia-ukraine

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BARCELONA, Spain (AP) — Catalan separatists will hold a rally in Barcelona on Sunday in an attempt by the march’s organizers to reignite the independence movement that is fraying as it nears the five-year anniversary of its failed breakaway bid from the rest of Spain.

For the past decade, the Sept. 11 rally held on Catalonia’s main holiday has been the focal point of the northeast region’s separatist movement. It has drawn in several hundreds of thousands of people clamoring to create a new country out of this corner of the western Mediterranean.

But the unity between pro-independence political parties and the civil society groups that led the October 2017 independence push, which received no international support and was quickly quashed, is in danger of falling apart.

The Catalan National Assembly (ANC), a civil group that organizes Sunday’s march, is strongly opposed to the talks that the Catalan government is holding with Spain’s central government in Madrid. The influential organization says it has lost faith in political parties and is ready to move on without them toward a new attempt at breaking with Spain.

That led Catalonia’s regional president, Pere Aragonès, to announce that he will be the first Catalan president to not attend the annual march, which separatists have used as a show of force.

Dolors Feliu, the president of ANC, told The Associated Press that she hopes Sunday’s rally will serve as a wake-up call for Aragonès to cease negotiations with the central government since she is convinced that, if left to Spain, Catalonia will never be free.

“We understand that it has to be the people on the street and the institutions committed to independence who achieve independence and that the Spanish state will oppose us,” Feliu said. “If we wait for the approval of the Spanish state, we won’t get anywhere.”

Aragonès did participate in other events on the holiday, but other members of his Republican Left of Catalonia party endured jeers of “traitors” from spectators when they made the traditional offering of flowers at a monument to a Catalan nationalist in Barcelona in the morning.

Aragonès defends the ongoing talks with the government of Spanish Prime Minister Pedro Sánchez as vital. He insists that he won’t renounce his pledge to hold another referendum on independence, but in the short term the talks are crucial to finding solutions for the dozens of Catalans who are in legal trouble for their role in the 2017 breakaway bid that was ruled illegal by Spanish courts.

Coinciding with the talks, Spain’s government issued pardons last year for nine Catalan separatist leaders who had been sentenced to long prison terms for leading the 2017 bid.

The infighting threatening Catalonia’s separatist cause comes while Scotland is seeking to hold a second independence referendum after the “No” vote won in 2014.

Catalan separatist parties won 52% of the votes in an election last year and maintained their hold on the regional parliament, but after years of extreme tensions and protests that turned violent in 2019, many people, especially the roughly half of Catalans who want to remain a part of Spain, are relieved that there is a dialogue with central authorities.

There are divisions also between the separatist political parties that form Catalonia’s government. The junior member of Aragonès’ government shares the ANC’s skepticism of the talks with Madrid. Its leadership has publicly talked about leaving the government unless there is a stronger plan of action to force independence.

But no one, not the ANC or the more radical separatist parties, seem to be able to articulate exactly how they can achieve independence if not via an authorized referendum. The 2017 bid was based on an unauthorized referendum on independence, and that only got the separatists into legal problems.

Historian Enric Ucelay-Da Cal, author of several books on Catalonia and its separatist movement, says that this marks the low point of the current push.

“I think the whole movement is out on a limb,” Ucelay-Da Cal told the AP. “I don’t see the association movement being able to lead any better than the parties have done, because none of them are facing the real facts. They are not sizing up who they are. They are saying ‘we are everybody.’”

He said that the movement’s splintering is “just a hangover: you had the party and it didn’t work out.”

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By Amruta Khandekar and Ankika Biswas

(Reuters) – Wall Street’s main indexes rose on Friday, boosted by technology and high-growth stocks, as investors awaited key inflation data next week to gauge the pace of interest rate hikes by the Federal Reserve.

U.S. equities have stabilized this week after a sharp selloff that began in mid-August on worries about the impact of tighter monetary policy and a slowdown in Europe and China.

The indexes are on track to snap their three-week losing streak, despite hawkish remarks from Fed policymakers that boosted expectations of another outsized rate hike at the central bank’s Sept. 20-21 meeting.

“We got oversold in the last couple of weeks in August and this is a relief rally,” said Dennis Dick, head of markets structure at Triple D Trading.

“The market is, to a certain extent, getting ahead of next week’s CPI (consumer prices index) data. It’s fairly predictable that the data next week is going to be light. We’ve had significant commodity deflation over the course of the last four weeks.”

Investors will watch for the August inflation report due next Tuesday for any signs that price pressures may be easing. It is expected to show that prices rose at an 8.1% pace over the year in August, compared with an 8.5% print for July.

Traders are pricing in an 86% chance of a 75 basis point rate hike at the next meeting, up from 57% a week earlier, according to CME Group’s Fedwatch tool.

Fed Chair Jerome Powell said on Thursday that the U.S. central bank is “strongly committed” to controlling inflation but there remains hope it can be done without the “very high social costs” involved in prior inflation fights.

Several Fed policymakers including Fed Kansas City President Esther George, a voting member of the rate-setting committee this year, are scheduled to speak later in the day.

All 11 major S&P sectors traded higher, with communication services, technology and consumer discretionary leading the way.

High-growth stocks such as Tesla, Apple Inc, Alphabet Inc and Amazon.com Inc gained more than 1% each.

The CBOE volatility index, a gauge of investor anxiety, fell to a two-week low of 22.9 but stayed above its long-term average of 20.

At 10:24 a.m. ET, the Dow Jones Industrial Average was up 271.31 points, or 0.85%, at 32,045.83, the S&P 500 was up 42.48 points, or 1.06%, at 4,048.66, and the Nasdaq Composite was up 170.53 points, or 1.44%, at 12,032.66.

Still, the S&P 500 and the Nasdaq are down nearly 6% and 8.3%, respectively, from their peaks hit in mid-August, as the Fed and other major central banks reaffirmed their commitment to bring down decades-high inflation.

U.S. equity funds recorded outflows of $11.5 billion in the week to Wednesday, their largest outflow in 11 weeks, BofA said on Friday.

Kroger Co rose 3.4% after the U.S. grocer raised its annual forecast.

Advancing issues outnumbered decliners by a 7.81-to-1 ratio on the NYSE and 3.32-to-1 ratio on the Nasdaq.

The S&P index recorded six new 52-week highs and no new lows, while the Nasdaq recorded 34 new highs and 35 new lows.

(Reporting by Amruta Khandekar in Bengaluru; Editing by Anil D’Silva)

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JOHANNESBURG (Reuters) -South Africa’s Competition Commission approved Heineken’s purchase of wine and cider company Distell Group as long as the merged entity invests more than 10 billion rand ($578 million) over five years in the country.

The Commission said on Friday the investment would be to maintain and grow the aggregate productive capacity of its operations and related facilities in South Africa.

The Dutch brewer announced in November its planned purchase of Distell and Namibia Breweries Ltd to form a southern African drinks group worth 4 billion euros ($4 billion).

The Commission recommended that the Competition Tribunal, which makes the final decision, approve the merger subject to conditions.

This is because it found that the proposed transaction is likely to substantially prevent or lessen competition in the relevant markets as the merged entity will be a dominant supplier of flavoured alcoholic beverages, with a market share above 65% and would be the largest supplier of ciders in South Africa.

“To address the competition concerns arising from the transaction, Heineken has committed to divest its Strongbow business in South Africa and other SACU (Southern African Customs Union) countries,” the Commission said.

The Commission and the merging parties also agreed to implement an Employee Share Ownership Scheme that will transfer more than 3 billion rand of equity to workers of the merged entity’s South African operations.

Other investments include establishing a 400 million rand supplier development fund to invest in small businesses, a 200 million rand contribution to promote localisation and growth initiatives within the country and an innovation, research and development hub for the Africa region based in South Africa.

To address employment concerns in South Africa, the merging parties have agreed to maintain employee headcount for a period of five years following the merger and not to retrench any employees below specified managerial grades, it added.

($1 = 17.3035 rand)

(Reporting by Nqobile Dludla; editing by David Evans and Louise Heavens)

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By Yoruk Bahceli

(Reuters) -Germany will not need to invest its central bank cash deposits in new ways for now after the European Central Bank decided to pay interest on them, a finance agency spokesperson told Reuters on Friday.

The news offers relief to markets concerned that such a change in response to Thursday’s interest rate hike, the ECB’s biggest ever, would have worsened a shortage of already scarce safe euro zone assets.

The ECB said on Thursday it would pay interest on governments’ cash deposits until April 30 2023, temporarily removing a 0% cap after the hike.

That has helped address fears that the cap would have encouraged governments to cut some of their cash balances at their central banks, worth some 600 billion euros ($598 billion), according to ING Bank, to deploy on the markets for more attractive rates.

Had the cap remained in place, euro zone debt offices would likely have taken out more collateral, in the form of high quality debt, from markets, to deploy the cash elsewhere, exacerbating a bond shortage caused by years of ECB asset-buying.

As expectations of a further squeeze on top-rated German debt eased, two-year yields shot up to 11-year highs on Thursday.

The supply of German debt, the euro area’s safe asset, has been a particular concern for investors. An even deeper shortage could have depressed overnight rates, hindering the transmission of ECB rate hikes into the financial system and the broader economy at a time of record-high inflation.

“As it remains possible for us to deposit liquidity with the central bank at market conditions, as of today we don’t have to make use of alternative investment options,” the finance agency spokesperson told Reuters.

She confirmed Germany would maintain its present strategy until the ECB’s removal of the cap expires in April 2023. That follows a similar decision by the Netherlands on Thursday.

TEMPORARY

Still, analysts warned that the ECB’s decision does not address the shortage of bonds markets already faced prior to the rate hike, and being temporary, only delays an adjustment money markets will need after years of negative interest rates.

“How our cash balance will look like from (May 2023) onwards remains to be seen. If still positive we would use alternatives to the deposit at the Bundesbank,” the German spokesperson said, referring to Germany’s central bank.

One way debt offices could deploy the cash is to lend it against government bonds through repurchase agreements. The finance agency has used such “reverse repos” when required and “economical”, the spokesperson said.

Investors worry that it would worsen bond shortages, especially as Germany had stepped up lending of its debt to investors this year in the repo market to address the shortage.

Some are already plotting changes ahead.

Austria’s Treasury said on Friday that although a change in its cash strategy was not imminent, it aimed to decide and apply a new one “well before” April 2023.

It was studying plans including lending securities in return for other securities, rather than cash.

(Reporting by Yoruk Bahceli; editing by Jason Neely, Nomiyamaand Tomasz Janowski)

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LONDON (Reuters) – Analysts at JPMorgan put an ‘underweight’, or sell sign, on international emerging market sovereign debt on Friday due to the global economic slowdown and ongoing rise in interest rates and the dollar.

The lender, viewed as one of the world’s most influential investment banks, said the premiums investors demand to hold EM debt rather than ultra-safe U.S. Treasuries could soon balloon out again having improved somewhat recently.

“We move underweight EMBIGD (from marketweight)” JPMorgan said referring the bank’s widely-tracked emerging market sovereign debt index.

The “risks are for the next big spread move to be wider than tighter in our view given late cycle financial conditions tightening and growth risks,” the bank’s analysts added.

(Reporting by Marc Jones; editing by Rodrigo Campos)

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By Julie Gordon

OTTAWA (Reuters) -Canada shed jobs for a third straight month in August, in a sign higher interest rates may be starting to cool the overheated economy, official data showed on Friday, though economists said it was unlikely to force a central bank pause.

The Canadian economy lost a net 39,700 jobs in August, missing analyst forecasts that it would add 15,000, Statistics Canada data showed. The jobless rate rose to 5.4%, missing calls it would edge up to 5.0% from a record low 4.9% in July.

“I think this can be taken as a reasonable indication that the economy is, in fact, slowing,” said Andrew Kelvin, chief Canada strategist at TD Securities.

“When you look at the increase in the unemployment rate, that does suggest that maybe a little bit of slack is starting to return to the labor market, though it’s not a complete process and it will be a slow process,” he added.

Canada has lost a net 113,500 jobs in the last three months. In June and July the majority of those losses were attributed to people leaving the labor force, but that trend reversed in August as 66,200 people joined the workforce.

Over those same three months, job losses were concentrated in educational services, an often volatile segment during the summer months, and wholesale and retail trade. In August, construction jobs also fell sharply.

Three straight months of job losses “hasn’t historically happened outside of a recession,” said Royce Mendes, head of Macro Strategy at Desjardins Group, adding: “The deterioration in the job market appears to be occurring faster than anticipated.”

Still, full-time employment was 3.9% higher than a year ago, Statscan said.

And wage gains continued to accelerate in August, up 5.6% on the year compared with 5.4% in July, with more people saying they were planning on leaving their current jobs in the next 12 months, citing pay and benefits as their top reason.

That wage pressure, which can fuel inflation, will likely keep the Bank of Canada in rate-hiking mode, economists said.

“I think the Bank will be more focused upon the wage side of the picture – the modest acceleration that we have there that’s ongoing,” said Derek Holt, vice president of Capital Markets Economics at Scotiabank.

Money markets pulled back from bets of a 50-basis point increase at the bank’s next decision in October after the data, leaning strongly toward 25 bps.

The Bank of Canada lifted its policy rate to 3.25% on Wednesday, its highest level in 14 years, and left the door open to more hikes amid hot inflation.

The Canadian dollar was trading up 0.4% at 1.3044 to the U.S. dollar, or 76.66 U.S. cents.

(Reporting by Julie Gordon in Ottawa; Additional reporting by Dale Smith in Ottawa, Fergal Smith in Toronto and Allison Lampert in Montreal; Editing by Tomasz Janowski, Paul Simao and Jonathan Oatis)

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By Dhara Ranasinghe

LONDON (Reuters) -Banks including Deutsche Bank and BofA said on Friday they expect another 75 basis point rate hike from the European Central Bank in October, a day after the central bank delivered a supersized interest-rate rise of that size to tame inflation.

The ECB raised its key rates by an unprecedented 75 basis points (bps) on Thursday and promised further hikes, prioritizing the fight against inflation even as the bloc is likely heading towards a winter recession and gas rationing.

“It is likely to be another close call in October and we have shifted our view to expect another 75 bps hike,” Deutsche Bank analysts said in a note, from its previous call of 50 bps.

They noted guidance from ECB chief Christine Lagarde that rates are “far away” from levels appropriate for getting inflation back to target in a timely fashion and that hikes should be anticipated at the “next several meetings.”

“This underscores the ECB’s insensitivity to the growth headwinds and laser focus on bringing inflation down,” the Deutsche note said.

BofA and Credit Suisse said they had also revised up their calls for a 75 bps ECB rate hike in October versus previous expectations for a 50 bps move.

Credit Suisse noted the ECB’s language pointed to more aggressive tightening ahead, and also lifted its forecast for the ECB rates to peak at 2.5%, from a previous estimate of 2%.

Money markets were on Friday fully pricing in a 50 bps rate hike in October and implied a roughly 25% chance of a more aggressive 75 bps move.

Still, anticipation of a more hawkish stance from the ECB appeared to be supporting the euro, which was trading back above $1 on Friday.

BofA analysts added that faster and more aggressive tightening now would likely force the ECB to cut rates earlier.

“We now pencil in the first 25bp cut by June 2024, with two additional 25bp cuts in September and December,” BofA said.

Citi said it continued to expect a 75 bps ECB hike in October and a 50bp hike to 2% in December before the weak economy stops further hikes.

(Reporting by Dhara Ranasinghe and Lucy Raitano , editing by Karin Strohecker and Jonathan Oatis)

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