Utahns’ worries about the future of the state economy has prompted a consumer-attitude gauge to drop to its lowest level in nearly two years.
The Zions Bank Utah Consumer Attitude Index (CAI) slipped 3.4 point to 110.7 in May, the lowest CAI since July 2016. The index is down 1.1 points from a year earlier. Meanwhile, the national Consumer Confidence Index rose 2.4 points to 128.0 in May and is 10.1 points higher than it was at the same time last year.
The Utah Future Expectations index, a measurement of confidence about the future of the Utah economy, fell 4.6 points from April to May. It is down 2.9 points from the year-earlier level. Compared to three months ago, fewer Utahns feel that the job market and household incomes will continue to grow over the next six to 12 months.
While Utahns’ are feeling less confidence about the future economy, most feel that current conditions remain highly positive and that jobs in the state continue to be plentiful. The positive sentiment is consistent with Utah’s unemployment rate of 3.1, which is at a 10-year low and is at or below what economists believe is typical “full employment” level.
Two factors impacting Utahns’ perception of the future are increasing prices of gasoline and rising home prices. Even after record increases in the price of gasoline, 69 percent of Utahns still believe gas prices will increase in the next 12 months. Similarly, 80 percent of Utahns believe the prices of homes will increase in the next 12 months. That is the highest percentage of Utahns expecting an increase in the price of homes since Zions Bank and Cicero Group began tracking consumer attitudes in Utah in 2011.
“As Utah continues to foster a robust job market that both keeps people here and attracts others to Utah, consumers will continue to see strong wage and housing price growth,” said Scott Anderson, Zions Bank’s president and CEO. “Job availability and the price and availability of housing are two of the largest factors that influence people’s perception of the state of the economy.”
“Increasing prices for gas and housing impact Utahns’ expectations,” said Randy Shumway, chairman and partner at Cicero Group. “The key factor that tends to counter these perceptions is wage growth. If Utahns see their wages increasing above inflation, then their perceptions will improve.
“Over the past year, we have seen strong job and wage growth and this was more apparent than price increases. Now things have reversed. Housing and gas price increases are front-page news and are hitting Utahns’ pocketbooks in real ways. This is starting to affect how Utahns see the overall economy.”