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Retail sales stay close to record high

Retail sales stay close to record high

Posted on: 1/25/2018 | Author: ATB Financial's Economics + Research Team

Albertans continued filling their shopping carts and grocery baskets in November, a trend that suggests the recession blues are in the past.

Total retail sales rang in at $6.79 billion in November, down only slightly from the record high in October. Comparing the total over the last 12 months to the same 12 months before that, sales are higher by 7.5 per cent. The data are adjusted to take into account the effects of seasonality.

What does this tell us about the nature of Alberta shoppers?

The first thing we know is that some confidence has returned to our province after the recession. The chart below shows how shoppers reacted to plunging oil prices and soaring unemployment starting in late 2014. Even if people had not been laid off their jobs, their confidence might have been shaken--and that led to a pullback in spending.

The second thing it tells us is that there was probably some pent-up demand by consumers. Even if you’re still not feeling 100 per cent confident about the economy, you may be forced to make some purchases because you can’t put it off any longer. Eventually, everything needs replacing.

The third thing this suggests is that Albertans may still be racking up their credit cards and lines of credit. With debt ratios at record highs, we know that at least some of this retail spending is done by borrowing. That could create some challenges, especially now as interest rates are climbing.​

New vehicle sales, graph​​​

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