Utahns remain confident in their economic situation, but seem to be hedging their bets just a little, according to the Zions Bank Utah Consumer Attitude Index (CAI) released last week for the month of February. The CAI decreased 0.1 points to 113.8 in February and showed a year-over-year drop of 4.1 points. In comparison, the national Consumer Confidence Index increased 9.7 points to 131.4 in February.
The Utah Present Situation Index, a sub-index of the CAI, slipped 2.2 points to 128.8 points in February. The number of Utahns who feel that jobs are plentiful dropped from 63 percent to 60 percent in February. Year-over-year, the Present Situation Index has increased four points, due primarily to Utahns’ perception that jobs are plentiful within the state.
The Utah Expectations Index inched up 1.3 points to 103.8 points in February due largely to Utahns anticipating the state economy will continue on the same trajectory for the next six months. Very few Utahns see business conditions worsening in the near future, with only 8 percent anticipating deteriorating economic conditions. That number is down from an already-low 12 percent in January.
As further indication that Utahns believe the state economy has hit the pause button, 66 percent of Utahns believe that Utah business conditions will remain the same over the next six months. This is a 5 percent increase from January and an 8 percent increase from a year ago. With this increased perception of relative calm, the Expectations Index has dropped 9.5 points since February of last year.
“Ongoing trade negotiations between the U.S. and China are having noticeable impacts on the global economy,” said Scott Anderson, Zions Bank president and CEO. “While changes to trade terms with China could impact both the price of and demand for American goods, Utahns maintain a largely positive economic outlook.”
The percentage of Utahns who expect interest rates to increase in the next 12 months dropped four percentage points in February, down to 66 percent from 70 percent in January. This drop accompanies signals in January that the Federal Reserve may hold off on raising interest rates further due to economic cross-currents like the U.S.-China trade negotiations, Brexit and the government shutdown that ended Jan. 25.
“We continue to see strong economic indicators in Utah even as consumer perceptions temper somewhat,” said Randy Shumway, chairman and partner of Cicero Group, a Salt Lake City consulting firm that does data collection and analysis for the CAI. “Utahns have seen a robust local economy for multiple years now, and while anticipation has tempered, job and income growth remain strong and these two factors will continue to drive consumer spending in the state.”