Consumer confidence improves but still low

Mon Jan 26, 2009 1:18pm EST
 
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OTTAWA (Reuters) - Consumer confidence in Canada rebounded slightly in January from a 27-year low in December as more people expected their financial situation to improve despite the recession, the Conference Board of Canada said on Monday.

The index in January rose to 70.2 from 67.7 in December, which was the lowest mark since the 1981-82 recession.

"As gasoline prices across the country continued to fall, respondents indicated that they were slightly more optimistic about their current financial situation," the organization said in a statement.

The number of people who said their families were better off today than six months ago rose by 0.8 percentage points to 13.3 percent. When asked if their family's financial situation would improve in the next six months, 22.2 percent said that it would, also an increase of 0.8 percentage points.

There was also a 1.7-point drop in the proportion who said their financial situation had worsened, to 24.8 percent.

An increasing number of Canadians believe now is a good time to make a major purchase such as a home or a car. That number rose to 28.5 percent from 26.7 percent.

Canada slipped into a recession in the fourth quarter of last year and the Bank of Canada forecast last week that the economy would contract 4.8 percent in the first quarter of this year, on an annualized basis. It expects the economy to decline 1.2 percent in 2009.

(Reporting by Louise Egan; editing by Peter Galloway)