Briefly: “Sun Life Canada, UK closed to new customers” and more news

By Staff | December 2, 2010 | Last updated on December 2, 2010
4 min read

If you are in the UK and want to sign up with Sun Life, you are out of luck.

In a surprise move, Sun Life Financial of Canada, UK will not be accepting any new customers and will only offer products, services to their existing clientele.

Sun Life cites the uncertain economic climate as the reason for the decision which could cost the company approximately 100 jobs.

– John Powell

Canadian bankruptcies rise

The federal bankruptcy office says more Canadian households and businesses became insolvent in September than in the month before.

The office says bankruptcies rose 9.6 per cent – 9.9 per cent for consumers – in September from the August numbers.

Insolvencies, which combine bankruptcies and proposals to refinance debt, rose 7.6 per cent overall.

The increases reverse a trend toward declining insolvencies since the recession, but the Office of the Superintendent of Bankruptcy says it’s not unusual to see an increase in the month of September.

Insolvencies for the third quarter overall are down 9.2 per cent, the office says, and bankruptcies are 11.4 per cent lower.

From last year, September’s insolvencies dipped 26.5 per cent and bankruptcies fell 36.6 per cent.

– Canadian Press

More Americans sign up for jobless benefits

More Americans applied for unemployment benefits last week, but the broader trend in layoffs points to a slowly healing job market.

The U.S. Labor Department says new claims for unemployment aid rose last week by a seasonally adjusted 26,000 to 436,000.

The previous week’s claims were revised up slightly to show applications had tumbled by 31,000 to 410,000. The figures are often volatile during the weeks around the Veteran’s Day and Thanksgiving holidays.

Even so, the longer-term trend has shown a downward drift.

The four-week moving average of claims, which smooths volatility, fell to 431,000 last week, a two-year low.

Applications for jobless benefits need to stay below 425,000 for several weeks to signal robust hiring, economists say.

Difficulties adjusting for the Thanksgiving holiday contributed to last week’s spike in new applications, a government analyst said. The unadjusted figures show new claims fell by 54,196 last week.

The claims figures provide economists with important signals about the health of the job market. They are a measure of the level of layoffs and indicate whether companies are hiring.

Employers have been reluctant to ramp up hiring this year, even as the economy grows modestly.

The economy added 151,000 jobs in October, the first increase in total payrolls in five months. Private companies were responsible for all of the new jobs. But the increase in hiring still wasn’t strong enough to lower the unemployment rate, which has been stuck at 9.6 per cent.

The government releases a new employment snapshot on Friday. Some economists are starting to raise their forecasts for job creation given recent signs of improvements in the broader economy.

Some think employers will add around 180,000 jobs in November. Others, however, are still forecasting a gain of 145,000 jobs. Most think that the jobless rate won’t budge.

Thursday’s report also showed that the number of people continuing to collect unemployment aid rose to 4.3 million for the week ending Nov. 20. That doesn’t include millions of additional people on extended unemployment programs that were set up during the recession.

Overall, 8.9 million people are receiving jobless aid, including 4.9 million that are doing so through the federally funded extended benefit programs. Those provide up to 99 weeks of benefits.

However, the extended programs expired at the end of November. Nearly 2 million will lose unemployment benefits as the holiday arrives if Congress doesn’t change its mind and renew the aid.

– Associated Press

Price pressure hitting Asia Pacific region

According to UBS, price pressure is being felt in Asia once again.

Case in point, in China inflation has reached 4.4% year-on-year in October and on an aggregated level (GDP weighted), inflation in the region excluding Japan moved above 3.5%. Though it is largely food price-driven, with core inflation staying at rather muted levels, there certainly could be more to come.

While it is too early to say that emerging Asia has an inflation problem, the conditions are set and the price pressure is expected to build further in 2011. Firm asset price “reflation” has already been seen over the last few quarters and factors such as the diminishing spare capacity in the economy, negative real rates and rising food, as well as energy prices, may allow consumer price increases to, at the very least, remain at elevated levels.

Strongly managed Asian currencies versus the USD, lower spare capacities in regional economies and rising energy prices hold the key for price pressure to broaden in 2011. When considering these factors, the 4.1% inflation forecast cast by UBS for emerging Asia in 2011 is on the conservative side. With crude oil prices likely to reach USD 100/bbl in 2011, inflation risks are skewed towards 5%.

With economic growth in the region remaining robust, a stronger shift in monetary policies towards a more restrictive bias is likely. Large domestically driven Asian economies, like China, as well as India and Indonesia, which both received an inflation forecast of well over 5%, should witness more price pressure, as well as those countries who desire to stick to the USD and the expansive US monetary policy.

UBS research did highlight one positive note, however. Since the beginning of 2009, Asian exporters have been enjoying the inventory restocking cycle in the developed world as well as from key emerging economies like China, and were able to post solid growth on the back of strong shipments to the world. However, the inventory cycle will fade going into 2011 and there will be a deceleration of Asia manufacturing activities.

This is partly due to factors such as the difference between US ISM new orders and inventories. Despite indciating slower economic growth, this level of decceleration will help contain Asia’s inflation pressure to a certain extent and aid the Asian central banks in not falling behind the curve during 2011. staff


The staff of have been covering news for financial advisors since 1998.