Could it be that Utah consumers are losing a little bit of their enthusiasm about the economy? After consecutive record-setting highs in October and November, the Zions Bank Utah Consumer Attitude Index (CAI) dipped slightly, decreasing from 124.4 in November to 118.7 in December. The overall Utah CAI now sits 1.1 points lower than its level 12 months ago. An index level of 118.7 still indicates extremely positive consumer attitudes regarding the economy, the CAI pollsters said.
The Utah Present Situation Index, a measure of confidence in current statewide economic conditions, increased 3.4 points, from 128.7 in November to 132.1 in December. This is the highest level that the Present Situation Index has ever recorded since its inception six years ago. This signals strong positive consumer market perception during the holiday shopping season, according to Zions Bank economists.
Although perceptions of the current state of the economy are at an all-time high, expectations for the future trajectory of the economy decreased 11.8 points to 109.7 in December. Perceptions of future labor market trends, fueled by Utah’s 2.7 percent year-over-year labor market growth, were highly elevated during the months of October and November and appear to be heading back to more sustainable levels.
“The elevated levels of consumer confidence that we are seeing currently are especially important during the holiday season,” said Scott Anderson, Zions Bank president and CEO. “Almost 70 percent of the gross domestic p roduct nationwide comes from consumption and consumer spending. As consumers are more confident in the Utah economy, I believe that GDP statewide will continue to increase.”
Although positive consumer attitudes likely have increased spending this holiday season, many Utahns are feeling the effects of economic growth in their everyday purchases. According to the Wasatch Front Consumer Price Index, prices are up 3.3 percent since December of last year. In the most recent CAI survey, nearly a quarter of Utahns stated that they anticipate spending more on holiday gifts this year compared to last year. Another quarter of Utahns stated that they anticipate spending more on winter sports activities this year compared to last year.
“Utah’s sustained economic growth this year has caused inflationary pressures to increase the cost of living statewide,” said Randy Shumway, chairman and partner of Cicero Group, a Salt Lake City research firm that does data collection and analysis for the CAI. “Although high rates of inflation across the state may seem daunting, I believe that wages within Utah’s robust job market will continue to increase, offsetting many of the negative side-effects associated with inflationary pressures related to economic growth.”