Utah consumers continue to feel a little better each month about their economic circumstances, according to the Zions Bank Utah Consumer Attitude Index (CAI) released last week. The index increased 1.8 points to 113.2 in September. The increase resulted from greater confidence in both the present economy and the prospects for the future economic situation. The overall CAI currently sits 3.2 points higher than its level 12 months ago.
By comparison, the national Consumer Confidence Index increased 2.3 points from August to September and currently sits at 104.1.
The Present Situation Index, a sub-index of the CAI that measures how consumers feel about current economic conditions, increased 1.5 points from August to September and is 8.0 points higher than it was at this time last year. Utahns believe the general business environment continues to be favorable, with 58 percent of them rating business conditions in their area as good — a 1 percent increase from September. In another category of the Present Situation Index, confidence in the labor market is improving. The percentage of Utahns who describe available jobs in their areas as plentiful increased from 49 percent to 53 percent in September.
Expectations for the next six months increased 1.9 points in September due to a slightly more positive outlook on future business conditions. The percentage of Utahns who think business conditions will be worse in six months decreased from 11 percent to 7 percent in September. Twenty-two percent of Utahns believe the U.S. economy is likely to improve during the next 12 months, a 2 percent increase from August to September. Meanwhile, the outlook for the labor market has improved slightly. Thirteen percent of Utahns think there will be fewer jobs available in their area six months from now, compared to 15 percent last month. Confidence regarding job security remained steady, as 79 percent of Utahns believe they are unlikely to lose a job they want to keep, which was unchanged from August to September.
Utahns are slightly more confident in the future market value of personal retirement savings, with 41 percent of consumers believing $1,000 invested in their 401(k) is likely to be worth more than $1,000 a year from now — a 3 percent increase from last month.
Furthermore, more consumers predict they will make major expenditures in the near future, as 30 percent of Utahns are likely to purchase a major household item in the next 60 days — a 2 percent increase from August to September.
“Utahns have plenty of reasons to be optimistic,” said Scott Anderson, president and CEO of Zions Bank. “Overall economic growth is rebounding from a sluggish start to the year as strong numbers for employment and housing continue to indicate a bright future for Utah’s economy.”
Gasoline prices began declining in September as refineries switched from a summer blend to a cheaper winter blend. However, this seasonal decline has stalled due to temporary supply disruptions stemming from a pipeline rupture in Alabama. The average gasoline price in Utah stood at $2.29 last week, while the national average stood at $2.21 per gallon. Most Utah consumers expect gasoline prices to rise over the next 12 months. Only 6 percent of Utahns expect gasoline prices to go down over the next year and the average estimated decline is 20 cents. Oil prices increased through the first half of 2016 before remaining relatively steady this summer. Brent crude oil futures were trading for about $46 per barrel last week, compared to $50 per barrel a month ago.
Although inflation has slowed in recent months, 61 percent of Utahns expect prices for consumer goods in general to increase over the next 12 months, similar to August’s 62 percent. More Utahns expect interest rates to rise, with 60 percent of Utahns believing interest rates for borrowing money will increase in the next 12 months, compared to 58 percent in August.
Satisfaction with the steps taken by the federal government to improve the overall economy of the U.S. increased, with 15 percent of Utahns indicating belief that the federal government is doing a good job compared to 12 percent in August. Approval of the state government remains relatively higher, with 49 percent of Utahns saying the state is doing a good job improving the overall state economy, representing an increase of 5 percent from August to September.
Utahns are slightly less confident in the housing market compared to August, as 64 percent of residents believe the price of homes in their communities will increase over the next year, down from 66 percent from August to September. Still, 39 percent of Utahns believe it is likely they will be able to retire and maintain their living standards, a 3 percent increase since August.
Zions Bank provides the CAI as a free resource to the communities of Utah. Analysis and data collection for the CAI are done by the Cicero Group, a market research firm based in Salt Lake City.