The Conference Board of Canada reported Monday that consumer confidence increased for a third straight month in September according to a poll conducted from Sept. 4 to Sept. 10, just days prior to the Sept. 15 bankruptcy filing by Lehman brothers, the subsequent U.S. government rescue of AIG and the call by U.S. Treasury Secretary Henry Paulson for a $700 billion bailout of Wall Street.

The think-tank's poll found Canadian consumer confidence rose 2.6 points from its August mark to hit 85.7. In June, Canadian consumer confidence hit a 13-year low of 79.6.

"Respondents indicated they were feeling much more optimistic about future job conditions in their communities and showed improving sentiment toward their current and future financial conditions," the CBOC report said.

Pedro Antunes, director of national and provincial forecasting at CBOC, said it is difficult to say how the most recent developments in the U.S. financial system will impact Canadian consumer confidence.

"It's not like we've had this type of financial crisis in the past," he said. "One thing that we know consumers react to are gasoline prices."

In June, when consumer confidence fell to its lowest point in 2008, gasoline prices had increased "quite substantially," Antunes said. While there is no doubt the financial turmoil will have an impact, he said the gasoline prices may offset some of that negative sentiment to some degree. He also added that while confidence has improved from June, consumers remain worried.

Slightly more consumers, 21.3%, said they were better off financially than they were six months ago for an increase of 0.8% over August's level, CBOC reported. Those who were worse off also increased, but by a smaller 0.3%. But optimism was really evident when consumers were asked about the next six months. Some 27.3% of consumers expect things to look up, an increase of 1.8 percentage points over August, and the largest jump in 2008, the CBOC report said. Furthermore, the number of people expecting things to get worse dropped 2.3 percentage points to 12.9%.

Although the balance of opinion remained negative concerning employment prospects, consumers were less pessimistic with 16.8% indicating they expect more jobs in their communities - an increase of 3.8 percentage points. Fewer people expected employment prospects to worsen with the share of employment pessimists falling 1.2 points to 26.4% of respondents.

When asked whether now is a good time to make major purchases, 36.8% of those polled said yes, an increase of 0.5 points over August. Fewer people told the CBOC poll it was a bad time to make a major purchase with 50.4% of respondents advising against a major buy, a decline of 1.6 percentage points from August.

Prior to July 2008, Canadian consumer confidence had been declining for four consecutive months. The September survey was based on 2,000 telephone interviews.

By Sean McKibbon, This email address is being protected from spam bots, you need Javascript enabled to view it , edited by Nancy Girgis, This email address is being protected from spam bots, you need Javascript enabled to view it

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