Monday, March 2nd-2.1°C

As European Central Bank prepares to start stimulus, rate of decline in eurozone prices eases

BRUSSELS - The fall in consumer prices across the 19-country eurozone eased in February, official figures showed Monday, in a development that will likely assuage market concerns that the region is set to suffer a pronounced period of deflation.

Eurostat, the EU's statistics agency, said annual consumer prices fell 0.3 per cent in February compared with a year earlier, half the rate recorded in January. The decline was also slightly less than anticipated — the consensus in the markets was for minus 0.4 per cent.

Still, the eurozone has suffered a drop in prices for three consecutive months and getting inflation back toward target remains the European Central Bank's primary policy motive. It's due to start a massive bond-buying program this month as part of a drive to get inflation back toward its target of just below 2 per cent.

Proponents of the stimulus, which is set to be worth around a trillion euros ($1.12 trillion), say the policy can help shore up the recovery in the eurozone and support prices by reducing the borrowing costs for businesses, households and governments. The associated fall in the currency — the euro is trading at near decade-lows against the dollar — could also help boost growth by making exports cheaper and push prices up by making imports more expensive.

In a separate encouraging development, Eurostat reported that unemployment across the eurozone fell to 11. 2 per cent in January, its lowest level since April 2012. Though the rate masks huge divergences across the region, it's another indicator showing that the eurozone's economic recovery is gaining some momentum. Compared with December 2014, the number out of work fell by 140,000.

The Canadian Press


Ottawa to extend tax credit for mining companies

TORONTO - The federal government plans to extend a tax credit for junior mining companies into next year.

The government wants to extend the 15 per cent Mineral Exploration Tax Credit until March of 2016 — it's currently due to expire at the end of the month.

The government says since 2006, the tax credit has helped junior mining companies raise over $5.5 billion for exploration.

According to the government, in 2013, more than 250 companies issued shares eligible for the credit to more than 19,000 individual investors.

Finance Minister Joe Oliver and Natural Resources Minister Greg Rickford made the announcement on Sunday at a mining conference in Toronto.

Oliver says the tax credit is part of the government's effort to support the mining industry and the 380,000 jobs it creates.

The Canadian Press

Feds appoint new corporate social responsibility watchdog for mining companies

TORONTO - The Conservative government has named its new corporate social responsibility counsellor for the mining sector.

It says the watchdog will have a more pro-active approach for dealing with complaints involving Canadian companies.

Longtime industry adviser and engineer Jeffrey Davidson takes on the role after a major overhaul of the government's strategy on responsible resource extraction abroad.

Davidson is a professor at Queen's University, and has worked specifically in the area of community relations and sustainable development for 15 years.

International Trade Minister Ed Fast said Davidson will be looking to prevent, identify and resolve disputes over environmental and human rights issues at their early stages.

Fast said that companies that do not comply with social responsibility guidelines and refuse dispute resolution will see any federal support for their projects withdrawn.

The position of corporate social responsibility counsellor sat vacant for a year, but the office continued to cost the government $181,600 according to information released in January.

The government says staff in the office carried out the duties while the counsellor position was vacant.

The Canadian Press


Federal and Ontario governments pay for study on how to ignite the Ring of Fire

TORONTO - Some of Canada's most remote and impoverished First Nations communities isolated within northern Ontario's so called Ring of Fire region are getting funding to conduct a study on how to open the area to development.

However at least one critic suggested the study, which is to look at establishing a year-round transportation corridor in part to allow mining operations, would be redundant.

The study will be led by the Webequie First Nation in partnership with the First Nations of Eabametoong, Neskantaga and Nibinamik, with the federal and Ontario governments each contributing $393,814.

Various stakeholders have been discussing for years how to connect the region. It has been widely agreed that economic development of the Ring of Fire would be very limited without some way to connect it to the rest of the world.

"We've always struggled to connect with the mainstream society, and I think as we move forward we will eventually connect with the real world and then hopefully we see the benefits that we always strive for," said Webequie First Nation Chief Cornelius Wabasse, adding that the remote community is only accessible by air in the summertime and by road in the winter months.

Nibinamik First Nations Chief Johnny Yellowhead said he was apprehensive of working with the provincial government at first but is pleased with the results.

"I was told when we started approaching Ontario -- you'll never get Ontario to listen to you," he said. "But I'm glad they're here, even the federal minister. We're making progress as we go and I'm very grateful to see that."

Natural Resources Minister Greg Rickford and Ontario Northern Development Minister Michael Gravelle made the announcement at a mining conference in Toronto on Sunday.

"What does that mean for this region?" Rickford said. "It means that communities will have the opportunity to work collaboratively to assess, plan and develop a shared transportation solution that will open the door for future development in northwestern Ontario."

Rickford said the project will position the region to capitalize on projects such as the Ring of Fire, but its main goal is to open up the region and meet the immediate and long term needs of local communities in the region.

New Democrat MP Claude Gravelle questioned spending money on a study, saying the investment should be focused directly on infrastructure in the region, because a similar study has already been done.

"This is the same announcement that was made in 1999 by the then-Liberal government to have a study on the permanent roads. There was even maps produced after the study indicating where the roads were going to go," he said.

"What we need right now is to get the work done. There's already been a study so why not use that study? The roads are going to go in the same place, so let's spend that $780,000 on infrastructure."

The remote region to the west of James Bay holds one of the world's richest chromite deposits, discovered in 2007, along with nickel, copper and platinum _ deposits Rickford estimated at between $30 to $50 billion.

Yet the region lacks both an electrical grid and a transportation corridor and faces daunting public infrastructure costs estimated well in excess of $1 billion.

An all-season road would connect these communities with the rest of the country, year-round, enabling the building of hydro lines and possibly the eventual development of the chromite deposits and other minerals.

"We recognize that obviously energy is a big piece of it," Michael Gravelle said. "If we are at the stage where we end up with an all season road obviously that opens up opportunities in terms of energy needs being met."

Rickford would not give a specific timeline as to when the study would be completed but said of the energy deficit that the corridor "ought to reflect the potential for some of the other challenges in developing our vast region."

The Canadian Press

BlackBerry deepens Samsung partnership in attempt to attract business customers

TORONTO - BlackBerry Ltd. (TSX:BB) is bulking up its security partnership with Samsung Electronics in an effort to attract more business customers.

The Waterloo, Ont.,-based smartphone company says it has locked in a new agreement that will integrate more of its services into Samsung Knox, the South Korean company's mobile security platform.

The pact is the latest in a growing relationship between BlackBerry and Samsung, once smartphone industry rivals who are now combining some of their efforts to bolster a competitive stance against Apple Inc., which is making its own solo push into the business community — known within the industry as enterprise users.

BlackBerry chief executive John Chen said his company brings additional security features to the table that Samsung needed to improve its slate of software.

"Samsung is a consumer company and they intended to get into the enterprise space," Chen said on a recent conference call with reporters.

"Enterprise needs a lot more than what the Knox offered."

The joint announcemt comes just before the start of the Mobile World Congress trade fair in Barcelona, Spain on Monday.

BlackBerry's WorkLife allows businesses to supply phones to their employees, but create a virtual divide within the device that allows it to operate as if it were two separate phones.

For instance, a company-owned phone can operate as both a personal and work phone, creating a split between work and personal phone calls, texts and data usage. It will be available through carriers later this year, though BlackBerry did not provide any specific target date.

SecuSuite software adds an extra level of security to the phone with encryption technology that makes voice and text communication "virtually tap-proof," Blackberry said. The service will be available on Samsung Knox this fall.

Last year, BlackBerry announced an initial partnership with Samsung, giving owners of Samsung Galaxy smartphones and tablets the option of linking with BlackBerry's new mobile security software, known as BlackBerry Enterprise Service 12.

BlackBerry has been trying to pivot its business model away from the consumer market under the leadership of Chen, who joined the company in late 2013.

His strategy has focused on cementing new relationships with corporate clients, as services and software revenues begin to eclipse the money it makes from handsets.

Part of that plan has involved rolling out some if its security services for other devices like the Galaxy and Apple's iPhones, which run on different operating systems.

However, getting the business community to view BlackBerry as more than just a device company has proven a challenge, especially since the company built its reputation around its famous keyboard smartphones.

"We have to keep telling our prospects and our customer base that we're supporting (multiple operating systems) because that's a fact," said chief operating officer Marty Beard.

"We don't want people to only see this as a BlackBerry offering."

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The Canadian Press

Will Smith's 'Focus' tops box office with $19.1 million weekend

NEW YORK, N.Y. - Will Smith's caper "Focus" dethroned "Fifty Shades of Grey" at the box office, but the film's modest $19.1 million opening still left questions about the drawing power of the once unstoppable star.

According to studio estimates Sunday, Warner Bros.' "Focus" easily topped all competitors on a weekend with little competition at the multiplexes. In second place was the Colin Firth spy thriller "Kingsman: The Secret Service," which made $11.8 million in its third week of release.

After two weeks atop the box office, "Fifty Shades of Grey" slid to fourth with an estimated $10.9 million for Universal Pictures.

The weekend's only other new wide release, Relativity's horror film "The Lazarus Effect," opened in fifth place with $10.6 million.

The Canadian Press

Markets to focus on Bank of Canada: will central bank cut rates again?

TORONTO - Market attention moves to the Bank of Canada this week now that the quarterly earnings season has pretty much wrapped up.

There are still a few companies to report, notably Bank of Nova Scotia (TSX:BNS), which hands in results on Tuesday.

A run of generally positive reports from the other big banks helped give some lift to the TSX last week, which finished up 0.04 per cent.

Traders are looking to the central bank's rate announcement on Wednesday to see if it will again surprise markets with a cut as it did in January. At that time, the bank decided to take a pre-emptive move to support the economy to deal with the economic effects of the collapse in oil prices, cutting its key rate a quarter point to 0.75 per cent.

Since then, there has been heightened speculation that the bank would cut again, as early as Wednesday. But Bank of Canada governor Stephen Poloz indicated last week that the bank may not want to move right away.

He said the cut in January has given the Bank of Canada time to figure out how best to steer the country back toward stability. And Poloz added that the rate cut in January has given policy-makers more confidence the economy should be back on a more sound footing by the end of next year, rather than some time in 2017.

"Prior to this week, the market had not just a rate cut almost completely priced in for March, it was assuming there was a good possibility of yet another rate cut after March," said Doug Porter, chief economist at BMO Capital Markets.

"Now, it’s actually seen as a bit of longshot for the bank to cut rates in early March although the market still is of the view there is a good possibility that at some point rates could be trimmed again."

Porter said that another rate cut depends on where oil prices head and the bank getting a better idea of the economic fallout from prices that have plunged 40 per cent from late November alone amid a huge demand/supply imbalance.

"It might take a little bit more time for everybody, including the bank of Canada, to get a better grip on exactly how serious this effect has been," he said.

Statistics Canada releases its latest data on gross domestic product growth for December and the fourth quarter on Tuesday but Porter doesn’t think that report will factor into decision-making on rates.

"I would assume they have a good read on it already," he said.

"It is going to be below what the bank expected in its monetary policy report in January — they were at that time expecting 2.5 per cent growth, it’s going to be closer to two per cent we think."

The other major economic event of the week is Friday when the U.S. government releases its employment report for February. Canadian employment data for February will be released March 13.

"The big story is the (U.S.) job market has turned for real over the last year and will just strengthen the case that the Federal Reserve will raise rates later this year," added Porter.

"We’re leaning towards September (but) I don’t rule out June."

The Canadian Press

Asian demand for Canadian lobster on the rise, prices not so much: fisherman

HALIFAX - Canadian lobster exports to Asia are growing but one lobster fisherman says that hasn't had much impact on Maritime shore prices.

Bernie Berry of the Coldwater Lobster Association said prices are not yet reflecting the increased Asian demand.

"We're not trying to look a gift horse in the mouth, it's just we were expecting maybe a little bit more," said Berry, whose organization represents fisherman in southwestern Nova Scotia.

Berry said prices in his area this year are about 10 cents higher on average than the year before. The bigger advantage of the Asian markets is that it is easier to unload catches, he said.

"Before the market in China really took off ... we were landing so many lobsters some of the times things would get backlogged," he said.

"But now I think there's enough market, it's big enough and still getting bigger, that it just absorbs what we can catch even though we're at record levels."

Exports of live Canadian lobsters to Asia have increased by more than 400 per cent over the past five years, Halifax Stanfield International Airport recently said in a news release.

The airport said during the holiday season last year, Korean Air Cargo made weekly flights to South Korea with each one carrying 40 to 50 tonnes of lobster, with the largest shipment recorded at 100 tonnes.

While China remains the biggest Asian market for Canada's lobster, South Korea is becoming increasingly important, said Geoff Irvine of the Lobster Council of Canada.

Canadian exports of live lobster to South Korea doubled in value between 2011 and 2013, the federal government says.

On Jan. 1, the Canada-Korea Free Trade Agreement came into effect, which Irvine said should further increase Canada's share of the Korean market.

"The key thing about South Korea is that the Americans have had a free trade agreement for several years and we haven't," said Irvine.

Irvine said the increased demand in Asia can be attributed in part to rising middle classes in the region.

The Lobster Council of Canada recently announced a branding plan for lobster exports, which Irvine said will include Asian markets as part of its focus.

The marketing plan depends on a proposed levy in which lobster fishermen, buyers and processors across the Maritimes would pay one cent per pound of lobster caught to cover the cost of promotional initiatives.

Nova Scotia Fisheries Minister Keith Colwell has said he hopes the levy can be in place by the fall. However, it has gotten resistance from some fishermen and buyers in the province.

Berry said while he understands the reluctance towards the levy, he believes marketing will be key to bringing up prices.

"As much as China's expanded over the past four, five or six years, I think it could be so much bigger and I guess it's how we get into that market and try to market our product that we're going to get a better price."

The Canadian Press

Federal food safety watchdog says 2 cows with BSE born on same Alberta farm

OTTAWA - Canada's food safety organization says two cows discovered to have mad cow disease in the last five years were born on the same Alberta farm.

Paul Mayers of the Canadian Food Inspection Agency said the most recent case detected earlier this month involves a cow born in 2009.

Another cow born on the same farm in 2004 tested positive for the disease in 2010, Mayers said. No parts of the cows got into human or animal food, the agency has said.

"At this time it would be purely speculative to suggest that because this case was born on the same farm as the previous case that there is some additional risk factor link," he said on Friday.

Mayers said the current investigation will include tracking 750 animals in the same birth cohort, which includes cows born before and after the infected animal.

He added investigators will also look at all the cows born on the farm between 2004 and 2010 which may have been exposed to the same feed.

"The feed cohort is of course larger," he said. "The focus of our feed investigation will include consideration on whether any non-compliance with respect to the feed ban may have contributed to this case.

"The scope of the investigation is broad," he said.

Mayers said it's the first time Canada has had two cases of mad cow disease linked to the same birth farm. It is also the first case detected in a cow in four years, he said.

Officials said China is the latest country to impose temporary trade restrictions on beef imports from Canada, joining Taiwan, Peru, Belarus and South Korea. Indonesia has also suspended imports of non-edible bone meal.

Mayers has said the case in Alberta has been reported to the World Organisation for Animal Health and won't affect Canada's official beef trade status.

"Canada's suite of internationally recognized safeguards effectively protects the safety of food and animal feed," he said.

Canada's chief veterinary officer, Dr. Harpreet Kochhar, said there was a comprehensive investigation into the 2010 case.

"We did a very thorough analysis of that particular feed cohort," he said. "The investigation actually concluded there wasn't one specific cause that could have been pointed out."

He added one possible factor could have been cross-contamination of feed, but Canada has since instituted an enhanced feed ban and improved surveillance measures.

"We are actually much more equipped," he said.

He said since 2005 more than 430,000 cows have been tested for mad cow disease.

A case of bovine spongiform encephalopathy in 2003 at an Alberta farm devastated Canada's beef industry. About 40 countries closed their borders to Canadian cattle and beef products, although most of those markets have since reopened.

— By Clare Clancy in Regina

The Canadian Press

OSC bans Conrad Black from holding company director, officer roles

TORONTO - Former media baron Conrad Black has been permanently banned from acting as a corporate director or officer of a public or private company in Ontario.

In a long-awaited decision Friday, the Ontario Securities Commission ruled that it's in the public's interest to prohibit Black and his ex-colleague, former Hollinger International Inc. chief financial officer John Boultbee, from roles that would enable the pair to direct or influence the management of a company's business.

The ban would "properly limit their ability to undertake conduct in the future that would be detrimental to the integrity of Ontario’s capital markets," according to the 45-page ruling.

"We have also concluded that, in the circumstances described in these reasons, such prohibitions should be permanent as there is no basis in these specific circumstances in our view for considering that the risk of future misconduct is somehow circumscribed by the passage of time."

Black, who is out of the country, dismissed the impact of the OSC's decision saying, as he did in testimony at the regulator's hearings last year, that he did not have plans to hold a position as a corporate director or officer within Ontario.

"It was never a material issue, since, as I testified, no one could pay me enough to be a director or officer of a public company in that jurisdiction," he wrote in a statement Friday, forwarded by his spokesman.

"The decision is at least welcome as the comparatively inoffensive end of more than 11 years of persecution," Black added.

The commission also ruled Friday that a proposal to personally ban Black and Boultbee from trading securities in the province was too far-reaching, concluding that their U.S. convictions were not related to these activities.

"The role of the commission is to prevent future conduct, having looked at past conduct as a guide, and not to mete out punishment for such past conduct," it said.

Black was convicted of wire fraud in the United States in 2007 while head of Toronto-based Hollinger Inc. in a case that, among other things, involved allegations that he and Boultbee took $600,000 from Hollinger in the form of non-compete payments.

A U.S. jury found Black, Boultbee and former business partner Peter Atkinson, guilty of three counts of fraud each. Black was also convicted of one count of obstruction of justice.

Later, the 7th U.S. Circuit Court of Appeals tossed two of the three fraud convictions against the men after the U.S. Supreme Court ruled that one of the laws used to convict had been too broadly applied.

As a result of the initial verdict, Black was sentenced to 42 months and fined $125,000, serving 37 months in a Florida prison. Boultbee was sentenced to time served, fined $500 and ordered to pay $15,000 in restitution to the Sun-Times Media Group. Atkinson was given time served and fined $3,000.

Another former colleague, David Radler, reached a deal with U.S. prosecutors in return for testimony against the men. He pleaded guilty to one count of mail fraud at U.S. District Court, and was sentenced to 29 months in jail and ordered to pay a fine of $250,000.

Friday's decision by the Ontario provincial regulator follows years of litigation surrounding Black's activities while he was head of the Hollinger group, which owned several major newspapers around the world.

Last October, he testified in front of the OSC that he had "no alternative" but to fight regulatory prohibitions on his activities and seek to clear his name of allegations and convictions that he considered illegitimate.

Black has previously been a director of several major companies, including CIBC (TSX:CM), and was both an officer and director of several of the companies within the Hollinger newspaper group that he also controlled as a major shareholder.

Despite the convictions in the U.S., Black has always insisted that he didn't break the law.

In contrast, staff with the commission argued that Black had the potential to commit further acts of fraud because he didn't show remorse for his actions.

Follow @LindaNguyenTO on Twitter

The Canadian Press

Most actively traded companies on the TSX

Some of the most active companies traded Friday on the Toronto Stock Exchange:

Toronto Stock Exchange (15,234.34, down 6.82 points):

Penn West Petroleum Ltd. (TSX:PWT). Oil and gas. Up five cents, or 2.03 per cent, to $2.51 on 27.9 million shares.

Bombardier Inc. (TSX:BBD.B). Aerospace, rail equipment. Down one cent, or 0.38 per cent, to $2.60 on 23.9 million shares. Its newest plane, the Bombardier CS300, made a five-hour test flight Friday, carrying Bombardier's hopes for recovering confidence in the company following repeated delays and mounting costs for its new line of passenger jets.

Pacific Rubiales Energy Corp. (TSX:PRE). Oil and gas. Down six cents, or 1.58 per cent, to $3.73 on 18.4 million shares.

Manulife Financial Corp. (TSX:MFC). Financial services. Down one cent, or 0.05 per cent, to $21.77 on 8.9 million shares.

BCE Inc. (TSX:BCE). Media. Down 34 cents, or 0.62 per cent, to $54.71 on 8.6 million shares.

Harte Gold Corp. (TSX:HRT). Miner. Up 1.5 cents, or 37.50 per cent, to 5.5 cents on 5.5 million shares.

Companies reporting major news:

Aimia Inc. (TSX:AIM). Loyalty programs. Down $1.50, or 10.45 per cent, to $12.85 on 8.2 million shares. It posted adjusted earnings of $60 million or 20 cents a share, four cents short of forecasts, although revenue of $761.1 million beat estimates.

Royal Bank of Canada (TSX:RY), Bank. Up 24 cents, or 0.31 per cent, to $78.31 on 3.8 million shares. Brand Finance ranked RBC the country's most valuable corporate brand for the second year in a row, estimating its brand value at US$12.5 billion — up from just over US$11 billion in 2014.

The Canadian Press

TSX advances amid rising oil prices, lower than expected U.S. growth

TORONTO - The Toronto stock market pulled back slightly Friday amid soft U.S. economic data and despite rising resource and financial stocks.

The S&P/TSX composite index closed down 6.82 points at 15,234.34. The Canadian dollar gained 0.15 of a U.S. cent to 79.98 cents.

New York indexes were significantly lower following a report that U.S. gross domestic product grew at an annual rate of 2.2 per cent in the October-December quarter, weaker than the 2.6 per cent first estimated last month in a reflection of weaker business stockpiling and a bigger trade deficit.

A bigger surprise was a glum reading on the manufacturing sector in the U.S. Midwest, which fell to a 5 1/2-year low in February. The Chicago Purchasing Managers Index fell to 45.8 from 59.4 in December, a reading indicating contraction.

"That number is a bit of a shocker, because that PMI number has remained consistently above 50 for many, many years," observed Himalaya Jain, portfolio manager, portfolio advisory group at Scotia McLeod.

"So, there is something very unusual (and) I would say that number would be treated with a very, very high degree of skepticism."

Also, the University of Michigan's widely watched consumer sentiment index slipped to 95.4 from 98.1 in January.

The Dow Jones industrials fell 81.72 points to 18,132.70, the Nasdaq lost 24.36 points to 4,963.53 and the S&P 500 index retreated 6.24 points to 2,104.50.

The TSX metals and mining sector led advancers, up 1.70 per cent as May copper was virtually unchanged at US$2.69 a pound.

April gold rose $3 to US$1,213,10 an ounce and the gold sector gained 1.1 per cent.

The energy sector fell 0.59 per cent even as oil prices advanced after having plunged almost $3 a barrel on Thursday to the lowest level in a month as data continued to show large buildups of crude inventories in the United States.

On Friday, the April crude contract in New York closed up $1.59 at US$49.76 a barrel though still own more than a dollar on the week as U.S. inventories remain at their highest levels in 80 years. Also depressing oil and other commodity prices lately is a steadily strengthening U.S. currency.

Tech stocks led decliners, down 2.07 per cent.

The TSX finished the week up 0.04 per cent amid a run of generally well-received earnings reports from most of the big Canadian banks.

In corporate news, Aimia Inc., (TSX:AIM) the company that operates customer loyalty programs for Air Canada (TSX:AC) and for TD Bank (TSX:TD) and CIBC (TSX:CM) credit cards and other business partners posted adjusted earnings of $60 million or 20 cents a share, four cents short of forecasts. Revenue of $761.1 million beat estimates, but the stock dropped $1.50 or more than 10 per cent to $12.85.

And Bombardier Inc.'s (TSX:BBD.B) CS300 passenger jet made its long-awaited maiden flight Friday. Prior to liftoff, Bombardier announced that it will get about $1.1 billion from a previously announced equity financing to help pay for the sharply higher costs of the CSeries program. Also, the Wall Street Journal says Bombardier plans to issue 3 1/2-year and 10-year debt but pricing has yet to be set. Bombardier shares lost a penny to $2.60.

The Canadian Press

Signed contracts to buy US homes climb in January to highest level in nearly 18 months

WASHINGTON - The number of Americans signing contracts to buy homes rose at a healthy pace in January, a sign that home sales are poised to accelerate after a slow start to the year.

The National Association of Realtors said Friday that its seasonally adjusted pending home sales index increased 1.7 per cent to 104.2 last month. December's figure was also revised higher to show a decline of only 1.5 per cent, considerably better than a previously estimated drop of 3.7 per cent.

The index is now 8.4 per cent above its level one year ago and is at the highest level since August 2013.

The data point to a rebound in sales of existing homes in the coming months, particularly as the spring buying season gets underway. Measures of sales and construction fell last month, raising concerns that the housing market would continue to struggle after a weak 2014. But economists expect that strong job gains, low mortgage rates and solid consumer confidence will give a moderate boost to home sales this year.

"Through the volatility, the trend in home sales is probably up modestly at least," Jim O'Sullivan, chief U.S. economist at High Frequency Economics, said in a note to clients.

Pending sales are a barometer of future purchases. A one- to two-month lag usually exists between a contract and a completed sale.

The largest increase in signed contracts occurred in the South, where they rose 3.2 per cent, followed by the West, where sales rose 2.2 per cent. Contract signings inched up just 0.1 per cent in the Northeast, where heavy snow may have weighed on housing. Pending homes sales slipped 0.7 per cent in the Midwest.

The increase in signed contracts comes after some disappointing data at the start of the year. Sales of existing homes tumbled 4.9 per cent in January to a nine-month low, while sales of new homes slipped 0.2 per cent. And new construction of homes and apartments fell 2 per cent in January.

But healthy hiring should encourage more Americans to start looking at homes. There are 3.2 million more Americans earning paychecks than there were 12 months ago. And younger Americans are finally seeing strong job gains, which could push up the number of first-time homebuyers, a critical ingredient in any housing recovery.

Mortgage rates remain near historic lows. The average 30-year fixed mortgage rate was 3.76 per cent last week, according to the mortgage giant Freddie Mac. That has ticked up in recent weeks, but is well below the 4.33 per cent average from a year ago.

The Canadian Press

US consumer sentiment index slides in February as wintery weathers chills consumer spirits

WASHINGTON - Harsh winter weather left U.S. consumers feeling a bit less confident this month, the University of Michigan says. But confidence levels still remain at the highest level in eight years.

The University of Michigan says its index of consumer sentiment slid to 95.4 in February from an 11-year high of 98.1 in January.

"It is hard not to attribute the small February decline to the temporary impact of the harsh weather," said Richard Curtin, chief economist of the surveys. Consumer confidence sank dramatically in the hard-hit Northeast and Midwest and rose in the South.

Overall, consumers' assessment of current economic activity and their expectations for the future both fell.

Earlier this week, the Conference Board, a business research group, said that its consumer confidence index fell a bit this month but remained at the highest levels since before the Great Recession began in late 2007.

A big drop in gasoline prices — which left money in consumers' pockets and contributed to their improving outlook — has reversed in recent weeks: Gasoline prices have risen to an average $2.37 a gallon nationwide from $2.04 a gallon a month ago, according to AAA.

"Consumers remain sensitive to any hint of decreased spending power, " Terry Sheehan, senior analyst at Stone McCarthy Research Associates, noted in a report, "and the rise in gasoline prices starting in February after seven months of declines was unwelcome." Still, it noted that confidence "levels remain among the strongest since before the financial crisis and recession."

The Canadian Press

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