Economic conditions in Utah remain strong but the state’s consumers are beginning to show some reservations about the future. The Zions Bank Utah Consumer Attitude Index (CAI) dropped 4.7 points to 115.8 in December. Anything above 100 still shows confidence in the economy, but the drop signals a little less confidence than in recent months.
By comparison, the national Consumer Confidence Index decreased 8.3 points to 128.1 in December.
The Utah Present Situation Index, a sub-index of the CAI, decreased 1.7 points to 132.1, while the Utah Expectations Index fell 6.6 points to 105. Regarding the fitness of the current economy, Utahns remain positive. About 58 percent feel business conditions are good, a dip of 6 percent from November’s record-setting high. And 63 percent feel jobs are plentiful, an increase of 2 percent from a year earlier.
Although Utahns are pleased with the current situation, they feel more reserved about future trends. Likely due to recent stock market fluctuations, the percentage of Utahns who believe current 401(k) investments will be worth more a year from now decreased from 49 percent to 39 percent, a full 10 percent drop.
“It appears that fluctuations in the stock market are impacting consumer perceptions,” said Scott Anderson, Zions Bank president and CEO. “When Utahns see decreases in their investment portfolios, they feel less wealthy, which can affect future willingness to spend.”
Despite changing perceptions with regards to the investment market, other market signals indicate economic growth will continue in the state. Utah consumers continue to report that jobs are plentiful and 95 percent of Utahns expect that their incomes will either increase or remain the same in the next six months.
“Federal Reserve rates have just increased for the fifth consecutive quarter,” said Randy Shumway, chairman and partner of Cicero Group, a Salt Lake City research firm that does data collection and analysis for the CAI. “Rate increases are designed to tap the brakes on inflation, but are also a sign that the Federal Reserve Bank has confidence in the economy’s future. Here in Utah, while we are seeing a few blips in the national markets currently, fundamentals around job growth and population growth remain very strong.”