On a year-to-date (YTD) basis, though, total spending was up 5.9% compared to the first half of 2024. Over half of this gain can be attributed to a 10% increase in sales at motor vehicle and parts dealers during the same period. This surge was largely driven by consumers escalating purchases to avoid potential tariff-related price increases.

However, the gains this year have been broad-based, with most sub-categories experiencing increases. One notable exception was gasoline stations, where revenues declined by 2.1% due to lower prices, aided by the elimination of the retail carbon tax.

As of June, Canadian counter-tariffs on U.S. imports have led to price increases across various consumer goods, including coffee pods, soup, dishwashers, microwaves, jewelry, notebooks, and suitcases. The precise impact of these tariffs is challenging to determine due to a lack of detailed retail trade data. However, some intuitive examples can be cited: average retail prices for electronics and appliances rose by 7.0%, while those for jewelry, luggage, and leather goods increased by 6.7% nationally on a YTD basis.

On an aggregate level, we observed a modest 1.6% increase in retail prices largely due to the mitigating effect of lower energy prices. Additional factors that likely curbed significant price hikes include retailers absorbing tariff expenses to sustain consumer demand, consumers opting for substitute goods, and the depletion of pre-tariff inventories.

Along with spending, employment in the retail sector has also increased. As of July, employment in wholesale and retail trades has increased by 4.4% YTD. Furthermore, the job vacancy rate within the retail sector in the first quarter of this year was down to pre-pandemic levels.

Retail spending is a key indicator of consumer health and provides insight into overall consumer goods spending. This data is significant because household goods consumption typically represents almost one-fifth of Alberta’s GDP.

Effective September 1, the Canadian government will lift retaliatory tariffs on CUSMA-compliant consumer goods imported from the U.S. This decision, while maintaining tariffs on steel, aluminum, and autos, is expected to alleviate pressure on consumers affected by past inflation and tariff-related instability. A new trade deal, however, remains elusive.

However, once the front-loading impacts of auto sales fade, consumer spending growth is expected to slow in the second half of this year with the ongoing cooling of the labour market. We expect real consumer spending to grow by only 1.7% this year before accelerating to 2.2% in 2026.

Answer to the previous trivia question: Cold Lake is one of the deepest lakes in Alberta. It has a maximum depth of 99.1 metres.

Today’s trivia question: Who coined the term kindergarten?