Despite a mild uptick in concern over their paychecks keeping up with increased prices, Utah consumers continue to feel fine about their financial future. The Zions Bank Utah Consumer Attitude Index (CAI) increased 1.4 points to 114.9 in August. The CAI stayed about level with a year ago when it measured 115.
By comparison, the national Consumer Confidence Index increased 5.5 points to 133.4 in August and is 10.5 points higher than what was reported in August 2017.
The Utah Present Situation Index increased 6.3 points in August to 130.3, which represents the fourth time that this index has exceeded 130 since Zions Bank began tracking consumer attitudes across Utah in 2011. Utahns are most confident about the employment outlook, with a record-low 8.5 percent of Utahns indicating jobs are hard to get. Additionally, Utahns’ assessment of general business conditions has held steady for the past 12 months.
“Utahns are optimistic about Utah’s rapid job growth,” said Scott Anderson, Zions Bank president and CEO. “The perception is that jobs generally are plentiful and this contributes to a positive economic outlook throughout the state. The key challenge going forward will be to manage the increase in housing costs and the effects that creates.”
The Utah Expectations Index slipped 1.9 points to 104.7 and is down 1.7 points year-over-year. Utahns’ expectations for future income and future business conditions have tempered relative to current conditions as 32 percent of Utahns believe their household income will increase, down 8 percent from 40 percent in August 2017.
Utahns are noticing increases in the prices of both homes and consumer goods and expect these prices to continue increasing. Three-fourths of Utahns (75 percent) expect home price increases while two-thirds (67 percent) expect an increase in consumer goods prices in the next 12 months. These price expectations have also affected how Utahns think about their future income relative to prices as 4 percent fewer Utahns see their household income increasing by more than the rate of inflation over the next two years.
“One of the goals of economic policy is to keep wage growth and prices commensurate,” said Randy Shumway, chairman and partner of Cicero Group, a Salt Lake City research firm that does data collection and analysis for the CAI. “We’re seeing continued growth in the job market and some competition for employees. We are also seeing price increases in the cost of housing. Although it can seem like growth is good for the economy, it is possible to see job growth focused on lower-wage jobs that don’t improve incomes. That is not the problem here in Utah. When we look at what jobs we are creating and attracting to the state, the data is actually pretty good. Wage growth is helping to mitigate the effects of price increases.”