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Albertans still spending strong, for now

Albertans still spending strong, for now

Posted on: 11/27/2018 | Author: ATB Financial's Economics + Research Team

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Albertans kept their wallets open in September as retail sales continued to hover around record highs ($7 billion). According to Statistics Canada, retail sales rose half a percentage point between August and September, bringing total spending 0.5 per cent off the record high achieved in May of this year. Total sales were 2.7 per cent higher compared to the same month one year earlier.

The federal agency notes the rise in retail sales over the course of the month was the result of higher sales at food and beverage stores.

Although consumers continue to spend at near record levels, they may actually be getting less in return. Price inflation is on the rise in Alberta this year. The price of goods in September, for example, was 3.0 per cent higher than a year ago. Prices in Alberta are on the higher end of the Bank of Canada’s target rate for inflation.

While retail sales hover around record highs, retailers may not be especially chipper. Higher wage costs and a lower Canadian dollar have forced them to raise prices, a move that’s likely affected their bottom lines.

Retailers in the province will certainly see action pick up through the holiday spending season. Next year, however, growth could slow. Employment is improving, though unevenly across all sectors, and the province's stubbornly high unemployment rate could push even higher in the coming months. All of this could result in Albertans choosing to keep their wallets in their back pockets.

Retail sales, graph

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