Utah consumers stay optimistic, marginally worried about China situation

Utahns may be hedging their bets a little about things like the future of business in the state, but they are still pretty optimistic about the economic situation as a whole. The Zions Bank Utah Consumer Attitude Index (CAI) increased 6.2 points to 119.3 in September, fueled mainly by the Present Situation Index, a sub-index of the CAI that jumped 6.9 points from August to September.

The September hike brought the year-over-year CAI to minus 4.7 points since last September.

The national Consumer Confidence Index took a 9.1 point hit in September to 125.1.

The increase in the Present Situation Index is due to seasonal fluctuations and improving sentiment toward business conditions and job availability, as fewer Utahns are pessimistic about current economic conditions. In September, 4 percent of Utahns feel business conditions are bad, down 1 percentage point from August and just 1 percent above the lowest level recorded since Zions Bank began tracking consumer confidence in 2011. Additionally, 8 percent of Utahns feel jobs are hard to get, down from 9 percent in August. The Present Situation Index is 0.7 points lower than it was in September 2018.

“Utahns recognize that our job market is strong — key to their sentiment about the future,” said Scott Anderson, Zions Bank president and CEO. “Even though we are hearing some concerns regarding the future of the economy, Utah continues to be well-positioned because of its robust and diverse economy.”

Compared to 12 months ago, Utahns are more uneasy about future business conditions. Currently, only 23 percent of Utahns feel business conditions will be better six months from now, a drop of 3 percentage points from a year ago. And 18 percent of Utahns feel business conditions will get worse in the next six months, an increase of 4 percentage points since September 2018. 

The Expectations Index, another sub-index of the CAI, rose 5.7 points from August to September. Utahns are notably more positive about their future incomes, with 40 percent of Utahns believing their income will increase in the next six months, the highest point since January 2018 and an increase of 4 percent since August.

According to data released by the U.S. Census Bureau, Utah now has the eighth-highest median household income in the nation. And Utah’s median household income grew 7.8 percent since 2017, also the eighth-highest rate in the nation.

One topic that has come to the forefront of conversations on the future of the national economy is the possible impact of trade negotiations between the United States and China. In the most recent CAI survey, 19 percent of Utahns indicated that they have noticed a personal impact as a result of trade negotiations. Fourteen percent of Utahns attribute higher prices to trade negotiations; 6 percent say they are concerned about overall economic volatility resulting from the negotiations; and 5 percent say the negotiations have negatively impacted their business through things like disruptions to supply chains and job instability.

“The growth of the national consumer price index has been below target levels, so the tariffs that China and the United States have already levied have not, as of yet, done much to raise prices for American households,” said Randy Shumway, chairman and partner of Cicero Group, a Salt Lake City research firm that does data collection and analysis for the CAI. “But some expect that effect to happen soon, particularly with the new rounds of tariffs largely being placed on non-durable goods.”