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Volume 15, Issue 33, September 10, 2015

Inside This Issue:

• Come Out and Support the 14th Annual Industry Memorial Golf Classic on September 30th
• 2016 Maple Leaf Night in Las Vegas to Take Place on Wednesday, May 4th
• HBC Swings to Profit as Real Estate Deals Bolster ‘Transformative’ Quarter
• Dollarama Raises Dividend as Profit Beats Estimates
• Sears Canada Faces Big Challenge in Turning Around Flagging Business
• Canadian Housing Starts Jump as Toronto Condo Building Booms
• Total Building Permits in Canada Dip in July but Multi-family Plans Surge
• Bank of Canada Holds Key Rate as Signs of Recovery Emerge
• Canada’s Economic Scoreboard: ‘Best. Recession. Ever’
• Canada Adds 12,000 Jobs in August, But Unemployment Rates Rises to 7%
• U.S. Job Growth Slows, Unemployment Rate Falls to 5.1%

Association News

Come Out and Support the 14th Annual Industry Memorial Golf Classic on September 30th

The 14th Annual Industry Memorial Golf Classic is taking place on Wednesday, September 30th at the Blue Springs Golf Club in Acton, Ontario.
The event is held on behalf of the hardware and housewares industry and it honours stalwarts from the industry who have passed away. CHHMA members and non-members are welcome to attend.

This year’s honourees will be: David Fry (Shop-Vac Canada), Ted Kennedy (Rubbermaid Canada, Past CHHMA Chairman 1975-76) & Geoff Somers (Wentworth Corporation, Somerset House)

Past honourees include: Ray Ceolin, Tom Ross, Bruce Webster, Chris Hrushowy, Mike Pullen, Jim Ypma, Bill Caldwell, Brayl Copp, Ed Hardison, Stuart North, Joseph Kuchar, Shelly Lush, Jack Pountney, Christof Vanooteghem, Ian Hay, Trygve Husebye, Bernie Carpenter, Don McDonald, Les Groves, Bob Hilton, Doug Straus, Mel Boshart, George Giles and Ed Barnes.

The day allows family, friends and colleagues to honour these gentlemen while enjoying a fun day out on the golf course followed by a dinner and silent auction.

The event will start off with registration and lunch at 10:30 a.m. with a shotgun start at noon.Dinner will commence at around 6:00 p.m.  

Money raised from hole sponsorships and a silent auction will go towards the CHHMA Scholarship Program which provides support for children of CHHMA member company employees to attend university or college (click here to see this year’s scholarship recipients).  So please consider sponsoring and/or donating an item for the silent auction for this worthwhile cause.

Click here to register online or click here for a: PDF registration form as well as a PDF silent auction pledge form

2016 Maple Leaf Night in Las Vegas to Take Place on Wednesday, May 4th

Next year’s Maple Leaf Night will take place on the evening of Wednesday, May 4th at the Mirage Hotel & Casino in Las Vegas. This popular social event is open to CHHMA members and Canadian customers in town for the National Hardware Show.

The 2016 National Hardware Show has decided to shift by one day, opening Wednesday, May 4, and closing Friday, May 6. Previously, the show was going to open on Tuesday, May 3, and close Thursday, May 5. The move was prompted by a change in the floor layout to the Central and North Halls of the Las Vegas Convention Centre.

Next year’s show will closely resemble the layout from 2014. The 2015 show took place in the central and south halls. “[The move] will offer us additional space on the show floor to more closely align each product category and provide attendees and exhibitors with a more manageable shopping experience,” said Rich Russo, industry vice-president for the show.

Meanwhile, Maple Leaf Night is always a great way to wind down after the first day of the show and offers CHHMA members a unique opportunity to mix and mingle with fellow members and Canadian retailers while enjoying cocktails and hors d-oeuvres.

So if you are planning to attend the show next May, plan to attend Maple Leaf Night as well and look for further event details and registration info in the new year.

Industry News

HBC Swings to Profit as Real Estate Deals Bolster ‘Transformative’ Quarter

Real estate deals helped Hudson’s Bay Co. return to profit in the second quarter, which its chairman says marked a “transformative” period for the retailer.

HBC completed joint ventures with two major real estate companies during the quarter and reached an agreement to acquire German department store chain Galeria Kaufhof – the company’s first move outside North America.

HBC’s net income for second quarter ended Aug. 1 was $67-million, which compared with a loss of $36-million in the second quarter of 2014 and $33-million in the first quarter of 2015.

The latest quarter included a $107-million gain from HBC’s contributions of properties to real estate joint ventures. On a normalized basis, HBC had a $53-million loss in the quarter – up from a $28-million loss a year earlier.

HBC’s retail sales under all banners, which include Lord & Taylor and Saks Fifth Avenue in the United States as well as Hudson’s Bay and Home Outfitters in Canada, totalled $2.04-billion – up $269-million or 15.2% from a year earlier.

Part of the increase in retail sales was due to the higher value of the U.S. dollar and an increase in digital sales. There was also same-store sales growth at some banners, including Off 5th – the lower-priced arm of Saks.

“This was a transformative quarter for us, with multiple major initiatives that will shape HBC for years to come,” Richard Baker, HBC’s governor and executive chairman, said in a statement.

“During the quarter we closed our joint venture with Simon Property Group as well as the first tranche of our joint venture with RioCan REIT, as we continue to execute on our strategies to highlight the value of our real estate assets.”

“We also entered into a definitive agreement to acquire Galeria Kaufhof, Germany’s leading department store chain, which we expect to be significantly accretive to our shareholders.”

Baker said all of HBC’s businesses are “in excellent shape” for the fall and holiday quarters, which typically are the busiest for retailers.

Source: The Canadian Press

Dollarama Raises Dividend as Profit Beats Estimates

Dollarama Inc. reported better-than-expected quarterly profit and sales as customers bought more higher-priced items, boosting its average revenue per transaction.

The company, which sells items priced up to $3, said items priced higher than $1 accounted for over three-quarters of its sales in the second quarter, up from two-thirds a year earlier.

Dollarama said on Thursday that its same-store sales rose 7.9%. Average value per transaction increased 6.2% and the number of transactions rose 1.5%.

Dollarama’s net income jumped to $95.5-million, or 74 cents per share, in the quarter ended Aug. 2 from $68.9-million, or 51 cents per share, a year earlier.

Total sales rose 14% to $653.3-million.

Analysts on average had expected a profit of 61 cents per share and sales of $562.9-million, according to Thomson Reuters.

Dollarama also raised its quarterly dividend to 9 cents per share from 8 cents.

Source: Reuters

Sears Canada Faces Big Challenge in Turning Around Flagging Business

The new executive chairman of Sears Canada Inc. says he is serious about finally fixing the challenged department store, but observers say he needs to hurry.

For years, Sears Canada has struggled with falling revenue and erratic profits or losses.  Now, Brandon Stranzl says he has developed a plan to turn around the retailer, partly by teaming with suppliers to focus on mid-priced brands.

Mr. Stranzl, a close associate of Edward Lampert, whose U.S. hedge fund is Sears Canada’s key shareholder, said last Wednesday that his team is already starting to reverse the sales slide with new merchandise rather than stocking aging excess inventory.

His blueprint for change also entails beefing up its discount outlets, shaving expenses, selling more non-core assets – and possibly shrinking some stores.

“We need to be able to fix this company and fix it as quickly as we can,” Mr. Stranzl, 41, clad in a hoodie over his light blue shirt – no tie – said in an interview with The Globe and Mail.

Mr. Stranzl, who commutes from his home in Greenwich, Conn., will need all the stamina he can muster to revive Sears, which has been losing ground for years to savvier rivals and new players.

One analyst recently predicted that Sears has less than two years to prove itself. “The next seven quarters are ‘make it or break it’ for Sears Canada,” retail analyst Keith Howlett at Desjardins Capital Markets said in late June.

Last week, Sears reported improved second-quarter results and its new action plan – and Mr. Howlett responded positively.

The new strategy “appears to represent a cohesive effort to turn operations around in partnership with suppliers,” said Mr. Howlett, who still recommends selling Sears stock.

Sears’s challenge is enormous. In the past few years, the retailer has raised money by selling some of its top store leases, sometimes making way for U.S. rival Nordstrom Inc., in the process raising questions about its fate.

“There’s a lot of uncertainty about Sears in the supplier community and even in consumers’ minds,” said Jean-Pierre Lacroix, president of retail consultancy Shikatani Lacroix. “We’ve heard the story before: They’re going to reinvigorate that brand. This is déjà vu.”

He said Sears needs to invest in its stores and brand while appealing more to new Canadians and millennials.

Mr. Stranzl, who often works in a cubicle at the Toronto head office rather than his office (“I like to be in the mix”), said he does not have a timeline for a turnaround, but he feels the heat to bolster results.

Mr. Stranzl is counting on partnering with select suppliers that will take on some of the financial burden of setting up and marketing mini-shops within Sears stores, starting with 12 brands, including Cherokee, Clarks, Nygard, Dockers and Levi’s.

At the same time, Sears is spending more on its website and profitable merchandise categories, such as mattresses, vacuum cleaners and fitness clothing, while ditching unprofitable product lines, most notably electronics and many tools and hardware items.

And the company is looking to cut annual costs by $100-million to $125-million this year and taking one-time charges of about $15-million to $20-million.

Mr. Stranzl plans to sell more non-essential assets, such as excess warehouse space. On Wednesday, the company unveiled $28-million of asset sales.

Mr. Stranzl said Sears is expanding its outlet stores to take on so-called off-price discounters, including Winners, Saks Off 5th and Nordstrom Rack – the latter two of which are arriving in Canada starting next year.

He has worked closely with Mr. Lampert, whom he considers a mentor, at his hedge fund and on the boards of Sears Holdings Corp. (of which Mr. Lampert is CEO) and its sister chain Kmart Holding Corp.

In his latest assignment, Mr. Stranzl recalled Mr. Lampert telling him: “I need someone I trust to figure out what is the right path for Sears Canada.”

But many analysts aren’t sold on the idea just yet.

“Like almost every other Canadian merchant, they were lapping a quarter that contained Target with a quarter that didn’t,” analysts Perry Caicco and Mark Petrie said in a research note last Thursday.

They believe Sears Canada can make a go of it in areas where minimal department store competition exists, but in order to do so, it will have to reduce its cost base quickly in order to avoid bleeding cash.

“Every dollar of cash bleed comes from equity holders because the cash hoard shrinks, and eventually a store with real asset value has to be sold to shore things up,” the CIBC analysts said.

“They need fewer stores, better brands, and way more cost-cutting. In our calculation, the retail operation is basically worthless at this point.”

Sears Canada’s adjusted operating loss came in at $27 million compared with CIBC’s estimate of a $4-million loss, and the analysts noted the 3.9% drop in adjusted operating earnings for the quarter marked the company’s seventh consecutive year-over-year decline.

Sales, general and administrative expenses were down by $13 million compared with last year’s period, but the SG&A rate continues to climb due to dwindling sales, they added.

CIBC estimates Sears Canada is worth about $13 per share, largely due to the value of its real estate, but the retailer needs to manage its business “so as to not drain so much cash that assets will have to be sold at fire sale prices,” the report said.

“So far, 2015 is proving to be no different than recent years past: same-store sales continue to regress, and though strides are being made in gross margin rate increases and SG&A decreases, these are not enough to offset the significant decline in revenues.”

The analysts said until Sears can turn EBITDA into a positive number, it will have to fund its business using its balance sheet rather than its operations.

CIBC increased its same-store-sales estimates to reflect Sears Canada’s recent improvement in that area and lowered its gross margin estimates because of the stronger U.S. dollar.

“The sum of these changes results in a decrease to our EBITDA estimate this year, from negative $51-million to negative $104-million, as the underperformance in this quarter plus the weaker gross margin more than offsets any sales general and administrative declines,” the analysts said.

CIBC, which rates the shares market perform, lowered its target price on the stock to $11 from $13. It also revised its forecasted 2016 operating loss to $6 million from $22 million to account for some traction in the retailer’s cost-cutting plan.

Mr. Howlett was a bit more optimistic, noting Sears Canada’s results were better than he expected: an operating per-share loss of about 30 cents versus a forecasted loss of 36 cents, and an operating EBITDA of negative $27.1 million, which bettered his prediction of negative $35.8 million.But he nevertheless rates the shares a sell, with a target price of $8.50.

Source: From Articles by The Financial Post and The Globe and Mail     

Economic News

Canadian Housing Starts Jump as Toronto Condo Building Booms

Canadian housing starts unexpectedly jumped in August from July as condo building surged to meet demand for lower-cost options in the nation’s hottest market, extending a housing boom that is one of the few bright spots in Canada’s otherwise tepid economy.

Wednesday’s report from the Canadian Mortgage and Housing Corporation (CMHC) showed the seasonally adjusted annualized rate (SAAR) of housing starts jumped 12.2% to 216,924 in August from an upwardly revised 193,253 units in July. Forecasters had expected 190,000 starts.

The SAAR of urban starts increased by 13.6% in August to 201,312 units. Multi-unit urban starts increased by 19.5% to 142,927 units in August and the single-detached urban starts segment increased by 1.4% to 58,385 units.

Meanwhile, the six-month moving average trend of housing starts increased to 196,565 units in August compared to 185,642 in July.

“Housing starts have been trending up, supported by strong condominium activity in Toronto. This is in line with CMHC’s most recent forecasts that would see demand shift from new higher-priced single-detached homes towards lower-priced alternatives,” said Bob Dugan, CMHC’s chief economist in a statement. “While national starts have increased, housing construction has started to slow in Alberta and Saskatchewan as a result of weakening economic conditions related to the decline of oil prices.”

In August, the seasonally adjusted annual rate of urban starts increased in Ontario, but decreased in British Columbia, the Prairies, Atlantic Canada and Québec.

Rural starts were estimated at a seasonally adjusted annual rate of 15,612 units, down 3.1% from 16, 104 in July.

Canada’s housing market continues to defy expectations for a slowdown, despite broader economic weakness and low oil prices, with strong demand in Toronto offsetting a softer market in oil-dependent Calgary. Historically low borrowing costs have helped extend the boom.

“(This is) the strongest level for housing starts since September 2012, and comes entirely on the back of a jump in new condo starts in Toronto,” BMO Capital Markets senior economist Robert Kavcic said in a research note.

Canada’s largest market had seen a cooling in condominium building in 2014 amid fears of a looming correction, but home prices and sales have barely paused since 2009 and analysts are divided over whether the boom will end with a crash or a soft landing.

The Canadian economy saw a mild recession in the first half of the year, but economists and policymakers expect growth will resume in the third quarter.

Source: CMHC, The Canadian Press

Total Building Permits in Canada Dip in July but Multi-family Plans Surge

The value of Canadian building permits issued in July fell less than expected as a decline in construction intentions for non-residential buildings was offset by a surge in plans for multi-family homes, data from Statistics Canada showed on Wednesday.

Building permits decreased 0.6% to $7.74 billion, far short of economists' expectations for a decline of 5.0%. June's figures were also revised up to an increase of 15.5%.

In the residential sector, the value of permits rose 8.7% to $5.0 billion in July, following a 16.7% increase the previous month. Gains were registered in four provinces, led by Ontario and British Columbia.  Quebec reported the largest decline in July after posting a 39.9% increase in residential building construction intentions in June.

Contractors took out $2.5 billion worth of multi-family dwelling permits in July, up 14.3% from June. This increase followed a 37.0% advance the previous month. Gains were posted in four provinces, led by British Columbia and Ontario. Quebec and Nova Scotia recorded the largest drops in construction intentions for multi-family dwellings, after large increases the previous month.

The value of permits for single-family dwellings rose 3.6% to $2.5 billion, a second consecutive monthly increase. Advances in Ontario, Alberta, British Columbia and Nova Scotia more than offset declines in the remaining provinces, with Quebec and New Brunswick reporting the largest decreases.

Municipalities approved the construction of 19,555 new dwellings in July, up 10.6% from June. The increase came from both multi-family dwellings, which rose 13.5% to 13,384 new units, and single-family dwellings, which increased 4.8% to 6,171 new units.

The value of permits for non-residential buildings fell 13.9% to $2.7 billion in July, following a 13.8% advance in June. Declines were recorded in six provinces, with Ontario and Alberta accounting for much of the decrease, followed by British Columbia. Saskatchewan saw the largest gain in the non-residential sector, followed by Yukon.

The value of permits for institutional buildings declined 43.7% to $646 million in July, following a 32.1% increase the previous month. The decrease was due to lower construction intentions for educational institutions, medical facilities as well as retirement residences and residential care facilities. Declines were posted in six provinces, led by Ontario and Alberta. Manitoba registered the largest increase, followed by Yukon.

Municipalities issued $502 million worth of industrial building permits in July, down 6.7% from June. Nationally, the decrease stemmed from lower intentions for maintenance buildings. Construction intentions for industrial buildings fell in six provinces, with Quebec and Ontario behind most of the decline. Alberta recorded the largest advance among the remaining provinces, as a result of increased intentions for utilities buildings.

In the commercial component, the value of permits rose 6.1% to $1.6 billion in July, the fourth increase in five months.  Higher permit values for recreational buildings, office buildings and service stations offset declines in retail and wholesale outlets, and warehouses. Increases were recorded in five provinces and two territories, led by Saskatchewan, Quebec and Alberta.

Regionally, the total value of permits fell in six provinces in July. Alberta posted the largest decline, followed by Quebec, Ontario and Nova Scotia.  The decrease in Alberta was due to lower construction intentions for institutional buildings and, to a lesser extent, multi-family dwellings.

In Quebec, the decline came mainly from decreased intentions for multi-family dwellings and industrial buildings, both of which had recorded notable increases the previous month.

The decline in Ontario resulted from lower intentions for non-residential buildings, mostly institutional buildings and commercial structures. Higher construction intentions for residential buildings, particularly multi-family dwellings, partly offset the drop in the non-residential sector.

In Nova Scotia, the decrease stemmed mainly from multi-family dwellings, which posted a significant increase the previous month.  In contrast, British Columbia recorded the largest advance, followed by Saskatchewan and Yukon.

In British Columbia, the advance was attributable to higher construction intentions in the residential sector, particularly multi-family dwellings. In Saskatchewan, the increase came from commercial buildings and, to a lesser degree, institutional structures. In Yukon, higher construction intentions for commercial buildings, institutional buildings and multi-family dwellings were responsible for the gain.

Source: Statistics Canada, Reuters   

Bank of Canada Holds Key Rate as Signs of Recovery Emerge

The Bank of Canada held its key interest rate at 0.5% on Wednesday amid a spate of improving economic news.

Looking at the rate of inflation, the impact of lower oil prices on Canada’s resource sector and the benefits of a falling dollar, the central bank said previous rate cuts are having stimulative effect on the economy.

Total inflation remains near the bottom of the bank’s target range, due to price declines in consumer energy products, the bank said in a statement. Core inflation has been close to 2%.

Canada’s resource sector continues to adjust to lower prices for oil and other commodities, with some spillover to the rest of the economy. “These adjustments are complex and are expected to take considerable time,” the bank said.

Economic activity continues to be underpinned by solid household spending and a firm recovery in the United States, with particular strength in the sectors of the U.S. economy that are important for Canadian exports, the bank said.

Increasing uncertainty about growth prospects for China and other emerging-market economies is raising questions about the pace of the global recovery. This has contributed to heightened financial market volatility and lower commodity prices. Movements in the Canadian dollar are helping to absorb some of the impact of lower commodity prices, the bank said.

While the overall export picture is still uncertain, the latest data confirm that exchange rate-sensitive exports are regaining momentum, the bank said.

This includes the biggest two-month gain in exports since 2011 and creation of 193,300 jobs in the 12 months through August, defying the normal pattern of a recession.Also, Statistics Canada reported better than expected housing starts for the month of August.

Coming on the heels of continuing job growth, improving exports and strong auto sales, it is seen as further proof Canada is climbing out of what had been a mild recession in the first half of the year.

“If this truly was a recession, it might be the only one where housing starts accelerated to multi-year highs,” Robert Kavcic, senior economist with BMO Capital Markets, wrote in a note to clients.

A minority of economists had expected the central bank to cut its rate in the face of continuing low oil prices and concerns about the impact of slowing growth in China on the global economy.

Canada had negative economic growth in the first five months of the year and although growth resumed in June, it was below zero for the first two quarters, meeting the technical definition of recession.

High auto production and sales and solid exports in June and July have raised expectations for the economy’s third-quarter performance.

In its July forecast, the Bank of Canada projected the economy would grow 1.5% in the third quarter. Most private sector economists’ forecasts are higher.

However, recent turmoil in global financial markets, heightened worries about emerging market growth and lower-than-projected oil prices remain a concern.
The bank has twice cut its trendsetting rate this year, most recently in July, bringing it down from 1% to 0.5% as low oil prices slammed Canada’s energy sector.

The central bank’s policymakers will publish their next quarterly Monetary Policy Report on Oct. 21, along with their latest rate decision.

Before that, however, the U.S. Federal Reserve is expected to begin raising its trendsetting lending level from near-zero.

The Fed has not lifted its key rate since 2006. But with strong employment growth and an improving economy, many forecasters see a rate launch coming as soon as Sept. 17.

Source: The Toronto Star, The Financial Post      

Canada’s Economic Scoreboard: ‘Best. Recession. Ever’

The recession debate occurring now on airwaves and among armchair economy watchers isn’t a debate at all, according to the Bank of Montreal’s Doug Porter.

“If you are just returning from Kazakhstan, you may have missed that Canada officially reported two consecutive quarters of declining GDP in the first half of the year, which nearly everyone promptly labelled ‘Recession,’” BMO’s chief economist quipped in a note last Friday afternoon.

“Everyone except for the majority of economists, that is.”

Two major forces have Porter and other experts dismissing the current downturn as something far less troublesome than a true recession: the country’s resilient job market and the seemingly indefatigable Canadian consumer.

“Canada’s economy just keeps on adding jobs, mostly of the full-time variety,” Porter said after the release of Statscan data that showed a gain of 54,400 full-time positions last month.

The jump has brought this year’s increase in full-time positions to a “massive” 174,000, the BMO economist said. “Hardly consistent with a true recession.”

Mr. Porter is not alone.

Overall job growth has held up well since last summer when oil and other commodity prices first started to slide, Scotiabank economists said shortly ahead of the release.

“Whatever this morning’s volatile print brings us, over 180,000 jobs have been created so far over the period since June 2014 when oil and other commodity prices really began to tumble,” the Scotiabank economists said. “This statistic — among others — makes it rather foolish to call it a recession.”

On the consumer front, much like their U.S. counterparts, Canadians are making big-ticket purchases like it’s their job, snapping up homes and cars in record numbers.

Outside of Alberta, home sales are posting strong — and in some cases such as Vancouver downright torrid — gains. And auto sales are “still rolling,” Porter said.

“On the recession debate, we will simply note that Porsche sales are up a tidy 30% so far this year in Canada,” the BMO economist said. “Yes, times are tough.”

If what Canada is caught in is a recession, here’s Porter’s take: “Best. Recession. Ever.”

Far from pulling back, Canadian households have plowed deeper into debt despite the economic slowdown. Total debts owed by Canadians jumped 4.9% in June compared to the same month last year, to $1.84 trillion. That’s the fastest pace of debt growth in more than two years, a new report from RBC Economics said Wednesday.

“Despite the weak economic performance in Canada … households continue to ramp up their reliance on borrowing,” Laura Cooper, an economist at RBC, said.

“The Canadian economy does not yet appear to be in recession, despite satisfying the commonly employed definition of having experienced two consecutive quarters of declining GDP,” Alexander Lowy, an associate economist at Moody’s Analytics, a sister company to the ratings agency, also said in a recent report.

“Moody’s Analytics defines a recession as a period with a sustained and widespread decline in economic activity and this downturn does not meet those criteria,” he added.

“More important, the details of the second-quarter GDP data paint a slightly brighter picture of the economy than expected.”

That’s at least partly because the numbers for June alone showed a pick-up.

With that recession question out of the way, what, then, does the future hold?

It won’t be strong economic growth, and Alberta will continue to suffer.

In a new forecast last week, for example, Bank of Nova Scotia trimmed its forecast for economic growth in Canada to 1% for this year, and just 1.7% for 2016.

Alberta’s economy is projected to contract this year, and perk up only slightly in 2016, while other provinces such as Ontario, Quebec and British Columbia will fare better.

Unemployment will also remain a trouble spot, holding at just shy of 7% through 2016, according to the forecast from Scotiabank’s Warren Kirkland.

Source: Global News, The Globe and Mail     

Canada Adds 12,000 Jobs in August, But Unemployment Rates Rises to 7%

Canada’s economy gained 12,000 jobs in August, bolstered by a gain in full-time employment, but more people were looking for work and the unemployment rate ticked higher for the first time in months.

The unemployment rate increased to 7.0% for the month, up 0.2 from 6.8%, where it had held steady for six consecutive months, Statistics Canada reported last Friday.

The overall increase came as the number of full-time jobs grew by 54,400, offset in part by a drop of 42,400 part-time jobs.

Compared with 12 months earlier, employment was up by 193,000 or 1.1%. Over the same period, full-time work increased by 318,000 (+2.2%) while part time declined by 125,000 (-3.6%).

The job gains were better than an estimated a loss of 4,500 jobs in August, according to Thomson Reuters.

Trade data last week was also stronger than expected, adding strength to the case that the economy is improving after slipping into a recession in the first half of the year.

Statistics Canada reported last week that the economy grew in June, the last month of the second quarter, raising hopes that the dip was short-lived and that the second half of the year would show growth.

“A decent hiring tally in August is in line with other stronger readings we have seen recently from Canada’s economy for the third quarter,” TD Bank economist Leslie Preston said.

However, she noted that more cyclical industries, such as construction and manufacturing, are shedding jobs.

“While it is good news that hiring in sectors like public administration and educational services are offsetting these losses for the time being, these gains are unlikely to be sustained, and we do expect hiring overall in Canada’s economy to slow through the remainder of 2015,” Preston said.

Friday’s job report says Saskatchewan led the way in August as it added 4,000 jobs, while Newfoundland and Labrador added 3,100. Manitoba added 2,700 and New Brunswick increased by 2,400. There was little change in the other provinces, Statistics Canada said.

Employment in public administration increased for the third consecutive month, up 14,000 in August. These recent increases offset earlier declines, leaving employment in the industry virtually unchanged compared with 12 months earlier.

In August, employment rose by 11,000 in educational services, continuing the upward trend that began earlier in the year. Compared with August 2014, employment increased by 53,000 (+4.2%), with most of the gains in post-secondary institutions.

Public sector employment rose by 27,000 in August, contributing to a year-over-year increase of 67,000 or 1.9%. The public sector includes all employees in public administration, most employees in utilities, as well as some employees in education, health care and social assistance, transportation and warehousing, and other industries.

While the number of private sector employees was virtually unchanged in August, it was up 124,000 (+1.1%) compared with August 2014.

Self-employment edged down in August, but was virtually unchanged compared with 12 months earlier.

Statistics Canada also reported that the unemployment rate for students aged 15-24 over the summer months from May to August was 16.8%, similar to where it was during the same time last year.

That compared with an unemployment rate of 10.3% for non-students in the same age category.

In a separate report, Statistics Canada reported labour productivity of businesses slipped 0.6% in the second quarter following a 0.5% decrease in the first quarter.

The agency said output of businesses decreased at a similar rate to the first quarter, while hours worked continued to increase.

Source: Statistics Canada, The Canadian Press  

U.S. Job Growth Slows, Unemployment Rate Falls to 5.1%   

U.S. payrolls rose less than expected in August, but a drop in the unemployment rate to a near 7-1/2-year low of 5.1% and an acceleration in wages kept alive prospects of a Federal Reserve interest rate hike later this month.

Nonfarm payrolls increased 173,000 last month as the manufacturing sector lost the most jobs since July 2013, the Labor Department reported last Friday. It marked a slowdown from July’s upwardly revised gain of 245,000 and was the smallest rise in employment in five months.

The report, however, may have been tarnished by a statistical fluke that in recent years has frequently led to sharp upward revisions to payroll figures for August after initial weak readings.

Indicating that the slowdown in job growth was likely not reflective of the economy’s true health, payrolls data for June and July were revised to show 44,000 more jobs created than previously reported. In addition, average hourly earnings increased 8 cents, the biggest rise since January, and the workweek rose to 34.6 hours.

“The payrolls data is certainly good enough to allow for a Fed rate hike in September, the big question is still whether financial market volatility will scupper the plans,” said Alan Ruskin, global head of currency strategy at Deutsche Bank in New York.

The U.S. dollar trimmed losses against a basket of currencies after the data, while prices for U.S. Treasury debt pared gains.

While the report may not change views that the U.S. economy remains vibrant amid volatile global financial markets and slowing Chinese growth, it could further complicate the Fed’s decision at a policy meeting on Sept. 16-17.

In the wake of a recent global equities sell-off, financial markets significantly scaled back bets on a September rate hike over the past month. But Fed Vice Chairman Stanley Fischer told CNBC last week it was too early to decide whether the stock market rout had made an increase less compelling.

A Reuters survey of economists had forecast nonfarm payrolls increasing by 220,000 last month, but economists warned that the model the government uses to smooth the data for seasonal fluctuations might not adequately account for the start of a new school year.

They said the data could be further muddied because of a typically low response rate from employers to the government’s August payrolls survey. A Labor Department official confirmed that the first payrolls estimate in August typically was revised higher.

Still, the improving labour market adds to a string of upbeat data, including figures on automobile sales and housing, that has suggested the economy was moving ahead with strong momentum early in the third quarter after growing at a robust 3.7% annual rate in the April-through-June period.

The jobless rate’s two-tenths of a percentage point drop took it to its lowest level since April 2008 and brought it into the range that most Fed officials think is consistent with a low but steady rate of inflation.

A broad measure of joblessness that includes people who want to work but have given up searching and those working part-time because they cannot find full-time employment fell to 10.3%, the lowest since June 2008, from 10.4% in July.

In August, construction payrolls rose 3,000 on top of the 7,000 jobs added in July. Mining and logging employment fell by 10,000 jobs last month. Manufacturing payrolls fell 17,000, despite robust demand for autos.

The increase in hourly earnings left them 2.2% above their year-ago level, still well below the 3.5% growth rate economists consider healthy. Some analysts think earnings are being held back by falling wages in oil field services.

But a tightening labour market and decisions by several state and local governments to raise the minimum wage should eventually translate into faster earnings growth and give the Fed confidence that inflation, which collapsed with oil prices, will move closer to its 2% target.

A number of retailers, including Walmart, Target and TJX Cos, have increased pay for hourly workers.  

Source: Reuters


 Upcoming CHHMA Events 

Industry Memorial Golf Classic
Wednesday, September 30, 2015
Blue Springs Golf Club, Acton, Ontario

Industry Cocktail
Date TBA, December, 2015
Location TBA, Montreal, Quebec

Canada Night
Held in Conjunction with the International Home+Housewares Show
Sunday, March 6, 2016
InterContinental Hotel, Chicago, Illinois

CHHMA Spring Conference & AGM
Tuesday, April 12, 2016
International Centre (Conference Facility), Mississauga, Ontario

CHHMA Maple Leaf Night
Held in Conjunction with the National Hardware Show
Wednesday, May 4, 2016
The Mirage Hotel & Casino, Las Vegas, Nevada

CHHMA Quebec Golf Classic
Thursday, May 26, 2016
Club de golf Le Fontainebleau, Blainville, Quebec

CHHMA Ontario Golf Tournament
Tuesday, May 31, 2016
Angus Glen Golf Club, Markham, Ontario

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