Utah consumers think things are pretty good with the current economy but are not so sure about the future, according to the Zions Bank Utah Consumer Attitude Index (CAI).
Utah consumers think things are pretty good with the current economy but are not so sure about the future, according to the Zions Bank Utah Consumer Attitude Index (CAI). The index increased 0.1 point to 105.8 in February. Increasingly positive perspectives regarding the present circumstances of the economy led to the slight escalation, but were counteracted by dipping expectations for the future.
The CAI currently sits 0.8 points lower than its level from 12 months ago. In comparison, the national Consumer Confidence Index decreased 5.6 points from January to February and sits at 92.2.
Expectations for the next six months decreased due to a more negative outlook on business conditions, future job availability and income situations. Compared to January, fewer Utahns think business conditions in their area will be better in six months, falling from 30 percent to 25 percent in February. Twenty-four percent of Utahns think there will be more jobs available in their area six months from now — a five-point decline since January. In line with this expectation for fewer job opportunities, 34 percent of Utahns expect their household income to be higher six months from now — a 2 percent decline since January.
The Present Situation Index, the sub-index of the CAI that measures how consumers feel about current economic conditions, has risen 4.4 points since this time last year. Fifty-four percent of Utahns rate general business conditions in their area as good — a 6 percent increase since January and a 4 percent increase since last year. Forty-six percent of Utahns describe available jobs in their area as plentiful, a 5 percent increase since January and a 10 percent increase since last year.
Gas prices seem to be stabilizing as the global glut of crude oil has slowed and refineries have cut production while preparing for seasonal maintenance. The average price in Utah stood at $1.74 last week, while the national average has fallen to $1.71 per gallon. Most consumers expect gasoline prices to bounce back and rise over the next 12 months. Sixty-seven percent say gasoline prices will increase. Only 12 percent of Utahns expect gasoline prices to go down over the next year. These expectations come as oil prices, which have fallen to historic lows, seem poised for a comeback as major OPEC leaders recently agreed to freeze output.
Following a rocky start for the year across major stock indexes, consumer opinions regarding major economic indicators remain mixed. While 66 percent of Utahns believe interest rates for borrowing money will rise during the next 12 months, this represents a 6 percent decrease since January. Similarly, the percentage of Utahns who believe prices for consumer goods will increase fell from 68 percent to 62 percent in February. Still, 32 percent of consumers expect $1,000 invested in their 401(k) to be worth more than $1,000 a year from now, compared to 31 percent in January. With 28 percent of Utahns expecting their household income to increase by more than the rate of inflation during the next two years — a 4 percent increase since january — many consumers expect their spending power to increase in the future.
“Despite the grim portrait painted by the stock market’s opening weeks of 2015, consumer confidence remains positive,” said Scott Anderson, president and CEO of Zions Bank. “As consumers bear in mind the inevitability of such market corrections, their confidence in the economic situation is accurately and largely unaffected, particularly here in Utah where the economy is so healthy.”
Perhaps due to low oil and consumer goods prices, 29 percent of Utahns are likely to purchase a major household item in the next 60 days, a 4 percent increase from Janaury. Furthermore, 38 percent of Utahns believe it is likely they will be able to retire and maintain their living standards, a 2 percent increase since January, and only 5 percent believe they are likely to lose their jobs, suggesting confidence in personal finance and employment increased in February.
As national attention turns toward the candidates running for office this fall, satisfaction with the steps taken by the federal government to improve the overall economy of the U.S. was up slightly in February, with 13 percent of Utahns indicating belief that the federal government is doing a good job compared to 11 percent in January. Approval of the state government is significantly higher, with 40 percent of Utahns saying the state is doing a good job improving the overall state economy, but this represents a 1 percent decrease since January.
Analysis and data collection for the CAI are done by the Cicero Group market research firm based in Salt Lake City.
Read more:The Enterprise - Present rosier than future say Utah consumers