Financial Update For Dec. 18, 2009

• TSX -163.98
• DOW -132.86
• Dollar -.87c to 93.43cUS
• Oil -$.01 to $72.65US per barrel.
• Gold -$28.90 to $1,106.80USD per ounce

New survey finds Canadians spending more this holiday season than last year TORONTO — Canadian shoppers are opening their wallets a lot wider this year than last despite concerns over the economy, according to a new survey that tallies retail sales.
Moneris Solutions Corp., a debit and credit card payments processor, says its figures show sales are up sharply leading into the last weekend before Christmas. The Moneris survey, released today, tracks national sales in the final five weekends of the pre-holiday season. It says that in the first weekend of December, shoppers spent five per cent more overall, with department stores the clear winner as their sales shot up 12.8 per cent.
Clothing stores saw a 5.4 per cent increase in sales in the Dec. 4-6 weekend, while drugstores reported a 3.8 per cent increase. Last weekend, Dec. 11-13, it was the turn of apparel retailers as they rang in an 11.4 per cent increase in sales amid an overall six per cent jump compared with 2008.
“As the Canadian economy begins a trend toward recovery, the increase in pre-holiday spending is a clear indication of renewed consumer confidence,” said David Ades, Moneris’ senior vice-president, sales and marketing.
“Canadians are clearly more optimistic about the future this year than they were during this time last year, and retailers are capitalizing on this by using creative marketing tactics to draw them in early and often,” Ades said.
With both debit and credit card options in their wallets, consumers had been showing a slight preference for debit cards earlier this year.
“(But) credit card transactions saw a resurgence as the economy recovered,” Moneris said in a news release.
The 2009 pre-holiday spending data compared national retail sales over the past five weekends with the same period last year. The data covers all merchant categories and tallies the dollar value as well as the number of transactions made on Moneris debit and credit card terminals across the country.
The Canadian Press
Rates not expected to rise as consumer prices rise Canadian Press OTTAWA – Canadians are again starting to pay more for most things they consume as the inflation rate jumped to one per cent in November, the second straight month prices have risen sharply.
While higher gasoline prices were mostly to blame, Statistics Canada said the advance was broad-based. Prices rose in seven of eight major components tracked by the agency, and in all 10 provinces.
As well, the month-to-month index was higher with prices rising 0.5 per cent from October.
The last two months have seen a complete reversal in the inflation story in Canada, which previously was one of falling prices and negative inflation.
But a rapid decline in gas prices from record highs in July 2008 has reversed the trend, the agency said.
“Prices at the pump are now exerting upward pressure on the Consumer Price Index after an extended period in which they were the main contributors to year-over-year declines in overall consumer prices,” the agency explained.
In November, gas prices were 14.1 per cent higher than at the same time last year and 13.1 per cent lower in October from the previous year.
Other components pushing prices higher were food, transportation, household operations, and furniture and equipment.
In addition, consumers paid 7.8 per cent more for car insurance and 3.2 per cent more for health and personal care.
Meanwhile, the cost of passenger vehicles fell six per cent, and shelter costs declined 1.7 per cent as natural gas prices were almost 30 per cent lower this year than last. The mortgage interest costs were also well below last year by four per cent.
Overall, the trend of inflation is unlikely to worry the Bank of Canada as most price increases remain tame. Food, which had been a major driver of price increases, gained only 1.7 per cent in November, the smallest increase since April 2008.
Core inflation, which the central bank closely tracks because it represents underlying inflation pressures, was actually lower in November at 1.5 per cent, compared to 1.8 per cent in October. That is still well below the central bank’s two-per-cent target.
Regionally, the largest increases in annual inflation occurred in New Brunswick, with a 2.2-per-cent rise. The rate rose 1.9 per cent in Prince Edward Island, and by 1.7 per cent in both Nova Scotia and Quebec.