Maple Leaf Night is once again taking place at the Mirage Hotel & Casino in Las Vegas on May 7th. This cocktail reception is always a great way to wind down after the first day of the show and is a great opportunity to mix and mingle with fellow members and retailers over cocktails and hors d-oeuvres while enjoying the bond of being Canadian.
You can also remind any of your Canadian retail customers to register online at www.chhma.ca!
Click here for further details and to register for the event
Industrial Product Prices Edge Up, Raw Material Prices Fall in March
Statistics Canada reported Tuesday that the
Industrial Product Price Index (IPPI) edged up 0.1% in March, led by higher prices for motor vehicles and other transportation equipment. Meanwhile, the
Raw Materials Price Index (RMPI) fell 1.7%, mostly because of lower prices for crude oil.
Industrial Product Price Index
The IPPI posted the third consecutive monthly increase in March, as prices in most commodity groups rose. Of the 21 major commodity groups, 15 were up, 4 were down, and 2 were unchanged.
The motor vehicles and other transportation equipment (+0.9%) was the largest contributor to the IPPI advance in March, which was primarily the result of higher prices for motor vehicles (+1.2%). The depreciation of the Canadian dollar relative to the US dollar was largely responsible for this increase.
Some Canadian producers who export their products report their prices in US dollars. Consequently, the 1.5% decrease in the value of the Canadian dollar relative to the US dollar may have the effect of increasing the IPPI. Without the measurable effect of the exchange rate, the index would have declined 0.3% instead of rising 0.1%.
Pulp and paper products (+1.0%) also contributed to the increase of the IPPI, though to a lesser extent. This increase was mainly attributable to higher prices for pulp (+2.7%).
Among the other product groups that posted gains was lumber and other wood products (+0.9%), particularly lumber and ties (+2.4%), which posted a fifth consecutive monthly increase. Concurrent with the increase in prices for lumber and ties, the number of housing starts was up for the second consecutive month in March.
Conversely, the IPPI advance was moderated primarily by petroleum and coal products (-1.8%), mainly as a result of lower prices for liquefied petroleum gases and diesel fuel. The IPPI excluding petroleum and coal products rose 0.3% in March.
Primary metal products (-1.2%) also declined, mainly because of lower prices for copper and copper alloy products, other non-ferrous metal products, nickel products and aluminum products.
Compared with March 2012, the IPPI was up 0.9%, the second consecutive year-over-year increase.
The IPPI advance was largely attributable to lumber and other wood products (+10.5%), specifically lumber and ties (+19.1%). Prices for lumber and ties continued to rise on a year-over-year basis, extending the upward trend that began in March 2012.
Compared with the same month a year earlier, motor vehicles and other transportation equipment (+2.1%) also contributed to the advance of the IPPI. The increase in this product group was mostly a result of the 3.0% depreciation of the Canadian dollar relative to the US dollar. Without the measurable effect of the exchange rate, the IPPI would have edged up 0.1% instead of rising 0.9% on a year-over-year basis.
Among the other commodity groups that posted increases was fruit, vegetable, feeds and other food products (+1.8%). Prices for feed products were up 9.0% on a year-over-year basis, continuing a trend that began in October 2010.
Conversely, the IPPI advance was moderated largely by primary metal products (-4.3%), specifically iron and steel products (-3.3%), other non-ferrous metal products (-3.9%) and aluminum products (-5.2%).
Raw Materials Price Index
Following two consecutive monthly increases, the RMPI declined 1.7% in March. Of the seven major commodity groups, four decreased.
The RMPI decline was largely attributable to lower prices for mineral fuels (-1.9%), specifically crude oil (-2.0%). Crude oil inventories in North America continued to increase in March. The RMPI excluding mineral fuels decreased 1.3% in March.
Non-ferrous metals (-2.7%) and animals and animal products (-1.7%) also contributed to the decline of the index, though to a lesser extent.
The decline in non-ferrous metals was led by copper concentrates (-3.5%), zinc concentrates (-4.8%) and other non-ferrous base metals (-5.3%). Almost all non-ferrous metal products posted lower prices in March.
Lower prices for hogs-swine for slaughter (-7.8%) and cattle and calves for slaughter (-1.3%) were the largest contributors to the decline in animals and animal products.
The RMPI decrease was moderated slightly by wood products (+0.1%).
Compared with the same month one year earlier, the RMPI decreased 2.0%, continuing the downward trend that began in March 2012.
The RMPI decline was mostly a result of lower prices for mineral fuels (-3.2%), specifically crude oil (-3.0%). Crude oil continued the year-over-year downward trend that began in March 2012. The RMPI excluding mineral fuels fell 0.8% on a year-over-year basis.
Among the other commodity groups that contributed to the year-over-year RMPI decrease were non-ferrous metals (-3.5%) and animals and animal products (-0.8%).
Compared with March 2012, the RMPI decline was moderated slightly by
vegetable products (+2.8%) and wood products (+3.5%).
Source: Statistics Canada
Latest U.S. Economic News
U.S. Consumer Confidence Rebounds in April
U.S. consumer confidence rebounded in April as Americans felt better about the outlook for the economy and their income prospects, according to a private sector report released on Tuesday.
The Conference Board said its index of consumer attitudes rose to 68.1 from an upwardly revised 61.9 in March. Economists had expected a reading of 60.8, according to a Reuters poll.
March was originally reported as 59.7. The expectations index gained to 73.3 from 63.7, while the present situation index improved to 60.4 from 59.2.
Even so, consumers remain vulnerable to concerns over the recent payroll tax hike and the $85-billion (U.S.) in automatic government spending cuts known as the sequester that was triggered last month, the report said.
“While expectations appear to have bounced back, it is too soon to tell if confidence is actually on the mend,” Lynn Franco, director of economic indicators at The Conference Board, said in a statement.
Consumers’ labour market assessment was mixed. The “jobs hard to get” index rose to 37.1 per cent from 35.4 per cent the month before, while the “jobs plentiful” index also gained to 9.8 per cent from 9.5 per cent.
Consumers felt better about price increases with expectations for inflation in the coming 12 months falling to 5.5 per cent from 5.8 per cent.
Source: Reuters
U.S. Home Prices Post Biggest Annual Gain in Seven Years
U.S. single-family home prices rose more than expected in February, racking up their best annual rise since May 2006 in a fresh sign the housing recovery remains on track, a closely watched survey showed on Tuesday.
The S&P/Case Shiller composite index of 20 metropolitan areas gained 1.2% on a seasonally adjusted basis compared to January, topping forecasts for 0.9%.
“Despite some recent mixed economic reports for March, housing continues to be one of the brighter spots in the economy,” David Blitzer, chairman of the index committee at S&P Dow Jones Indices, said in a statement.
On a non-adjusted basis, prices rose 0.3%.
Prices in the 20 cities gained 9.3% year-over-year, also beating expectations for 9% and the biggest increase since May 2006.
On an annual basis, prices improved in all 20 of the cities covered in the index, the second month in a row that all of them have risen.
The biggest gains were seen in some of the cities that were hardest hit by the crisis, including Phoenix, which rose 23%. Atlanta climbed 16.5%, while Las Vegas was up 17.6%.
On average, national home prices are back to the levels they were at in the autumn of 2003.
Prices have been rising since last February as the sector started to turn the corner, helped by tighter inventories and improved sales.
Last year’s housing recovery has continued into 2013, though the pace of sales has cooled recently. Still, housing is expected to continue to be a source of strength for the economy this year.
Source: Reuters
U.S. Pending Home Sales Rise in March
Contracts to purchase previously owned U.S. homes rose in March, as the housing market continues to accelerate this year.
The National Association of Realtors (NAR) said on Monday its Pending Sales Index, based on contracts signed last month, rose 1.5% to 105.7. Activity in recent months has shown modest improvements, and contracts last month reached the highest level since April 2010.
Economists polled by Reuters had expected signed contracts, which become sales after a month or two, to rise 1.0% after a previously reported 0.4% slip in February.
The housing upturn is expected to add support to the economy this year although there have been signs of weakness lately.
The inventory of homes for sale remains low, leading to a rise in home prices in most markets. The Realtors group said the market appears to be levelling off due to the supply shortage which has pushed up home values, putting a solid foundation under the housing recovery.
“Contract activity has been in a narrow range in recent months, not from a pause in demand but because of limited supply. Little movement is expected in near-term sale closings, but they should edge up modestly as the year progresses,” said NAR chief economist Lawrence Yun in a statement.
Pending home sales were up 7.0% compared to March last year.
Source: Reuters
U.S. Consumers Boost Spending Despite Higher Taxes
Americans spent more last month and their income grew, the latest indication that tax increases have yet to hold back the consumer.
The Commerce Department said Monday that consumer increased their spending 0.2% in March from February. That followed a 0.7% jump in February and a 0.3% gain in January.
Income increased 0.2% last month, following a gain of 1.1% in February. After-tax income also rose 0.2%.
Higher income has helped offset an increase in Social Security taxes that took effect on Jan. 1. Last Friday, the government said consumer spending rose from January through March at the fastest pace in more than two years.
Spending on services drove the March increase. That was partly due to an unseasonably cold March, which required Americans to pay more to heat their homes.
Still, other reports suggest consumers may be starting to feel the impact of the tax increase. Sales at retail stores and restaurants fell in March by the most in nine months.
The 2-percentage-point tax increase has reduced tax-home pay for nearly all Americans. A person earning $50,000 a year will have about $1,000 less to spend this year. A household with two highly paid workers will have up to $4,500 (U.S.) less.
That may slow consumer spending and economic growth in the April-June quarter. Consumer spending accounts for about 70% of economic activity.
Other trends may offset some of the impact of the taxes this year. Consumers have cut their debts and rising home values and stock prices have increased household wealth.
In addition, gasoline has become cheaper. The national average price for a gallon of gas has fallen by 29 cents since Feb. 27 to $3.50. A decline in gas prices leaves consumers with more money to spend on other things.
Source: The Associated Press
U.S. Economic Growth Falls Short of Forecasts, Weakness Ahead
U.S. economic growth regained speed in the first quarter, but not as much as expected, which could heighten fears the already weakening economy could struggle to handle deep government spending cuts and higher taxes.
Gross domestic product expanded at a 2.5% cent annual rate, the Commerce Department said last Friday, after growth nearly stalled at 0.4% in the fourth quarter. Economists had expected a 3.0% growth pace.
“It wasn’t the bang-up start to the year we had hoped for, and the signals from March suggested that we will only decelerate from here,” said Avery Shenfeld, chief economist at CIBC World Markets Economics in Toronto.
Part of the pick-up in activity reflected farmers’ filling up silos after a drought last summer decimated crop output. Removing inventories, the growth rate was a tepid 1.5%.
Still, most areas of the economy contributed to growth, with the exception of government, the trade sector and investment by businesses in offices and other commercial buildings.
While consumer spending increased solidly, it came at the expense of saving, which does not bode well for future growth.
A separate report showed worries about finances sapped consumer morale in April. The Thomson Reuters/University of Michigan’s final reading on the overall index on consumer sentiment fell to 76.4 last month from 78.6 in March.
The GDP report offers ammunition for the Federal Reserve to maintain its monetary stimulus. The U.S. central bank, which meets next week, is widely expected to keep purchasing bonds at a pace of $85-billion a month.
Data ranging from employment to retail sales and manufacturing weakened substantially in March after robust gains in the first two months of the year, and the factory sector appears to have slowed further in April.
Many forecasters expect the U.S. economy’s softness to persist into the third quarter until signs of a convincing revival emerge.
Consumer spending, which accounts for more than two-thirds of U.S. economic activity, increased at a 3.2% pace – the fastest since the fourth quarter of 2010. It grew at a 1.8% rate in the fourth quarter of last year.
The increase in spending came despite the return of a 2% payroll tax and higher gasoline prices. Households, however, had to cut back on saving as incomes dropped at a 5.3% rate, the steepest descent since late 2009.
The saving rate – the percentage of disposable income households are socking away – fell to 2.6%, the lowest since the fourth quarter of 2007, from 4.7% in the final three months of last year.
Despite the spike in gasoline prices, inflation pressures were benign. Inflation rose at a 0.9% rate, the smallest increase since the second quarter of 2012 and a sharp slowdown from the 1.6% pace logged in the fourth quarter.
A core measure that strips out food and energy costs rose at a 1.2% rate.
Government spending fell at a 4.1% pace, with declines at both the federal and the state and local levels. Government spending has declined for 10 of the last 11 quarters.
“The decline in government spending over the past two quarters is the biggest six-month contraction since the Korean war ended,” Paul Ashworth, chief U.S. economist at Capital Economics in Toronto said in a research note.
Business spending on equipment and software slowed sharply, growing at an only 3.0% rate after a brisk 11.8% pace in the fourth quarter.
Economists caution that it is too early to blame the cooling in business investment and other more recent signs of economic softness on the $85-billion in mandatory government spending cuts, known as the sequester, that began on March 1.
Homebuilding marked an eighth straight quarter of growth, though the pace moderated from the fourth quarter. Housing added to growth last year for the first time since 2005 and its recovery should help ensure the economy does not contract.
While export growth rebounded, it was outpaced by imports, resulting in a trade deficit that cut off half a percentage point from output.
Source: Reuters, The Globe & Mail