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Salt Lake City — The Zions Bank Utah Consumer Attitude Index (CAI) increased 2.0 points to 106.9 from July to August as Utahns are feeling confident about business conditions and employment. For comparison, this month’s national Consumer Confidence Index (CCI) increased 2.1 points to 92.4.
Utah’s CAI continues to tick upward, and a strong Expectations Index last month translated into a strong Present Situation Index this month. Utah’s CAI has improved 18.5 points over the past 12 months. The Present Situation Index, the sub-index of the CAI that reflects how consumers feel about current economic conditions, increased 8.7 points from July to August, reaching 112.0 points.
Consumer confidence in current economic conditions in Utah is now at a record high. The jump stems from a combination of more positive attitudes about current business conditions and increased perception that jobs are more plentiful.
This month Utah met the challenge to create 100,000 jobs in 1,000 days, a significant accomplishment that correlates with Utah’s consistently low unemployment rate over the past few months. While Utah’s unemployment rate ticked back up to 3.6 percent in July after dropping to 3.5 percent in June, this slight uptick in the unemployment rate did not noticeably affect opinions about the labor market: the percentage of Utahns who describe jobs in their area as plentiful increased to 33 percent in August from 32 percent in July. Opinions that current business conditions are good experienced an even bigger jump, increasing from 45 percent in July to 48 percent in August.
The Expectations Index, the sub-index of the CAI that reflects consumers’ expectations for economic conditions six months from now, declined in August by 2.5 points after increasing 10.1 points in July. A higher percentage of Utahns expect business conditions to be better six months from now — 30 percent in August compared to 26 percent in July — but expectations for available jobs and growth in household income both declined slightly. Utahns who expect the number of available jobs in their area to increase in the next six months fell to 27 percent in August from 29 percent in July. Likewise, those who expect their total household income to be higher six months from now decreased one point to 33 percent. Expectations are higher than they were 12 months ago, however, with household income expectations up 8 percentage points and expectations of job availability up 3 points from August last year.
Expectations regarding increasing interest rates experienced a slight decline. Utahns who think interest rates will go up over the next 12 months declined from 60 percent to 59 percent in August. The percentage of Utahns who think interest rates will go down remained the same. Expectations that prices of consumer goods over the next year will go up increased from 77 percent to 78 percent. Utahns are slightly more optimistic about an increase in their 401K plans. The percentage of Utahns who think a $1,000 investment in their 401K today will be worth more than $1,000 one year from now increased from 37 percent in July to 39 percent in August. Expectations that the U.S. economy will improve during the next 12 months remained steady at 25 percent.
Utahns became slightly more confident about their personal wealth this month. More Utahns expect prices of homes comparable to theirs to increase, jumping from 61 percent in July to 63 percent in August. Utahns were equally as confident this month as last month in their ability to maintain their current living standards in retirement with the percentage remaining at 33 percent. The percentage of Utahns who expect their household income to increase more than the rate of inflation over the next two years increased from 24 percent to 27 percent.
Gasoline prices in Utah typically trail the national average by four to six weeks, and national prices have been declining for a few weeks. Expectations have adjusted accordingly. The percentage of Utahns who think gasoline prices will increase over the next year decreased from 78 percent in July to 76 percent in August. Gas prices in Utah peaked in July and have since started to decline. Utahns who expect gas prices to increase think they will increase by an average of 34 cents over the next twelve months. Likewise, those who think gasoline prices will decrease believe they will drop by a similar margin of 33 cents.
“Utah’s job growth has been a model for the rest of the country,” said Scott Anderson, president and CEO of Zions Bank. “Our economy continues to grow in diverse sectors that bring talent, investment, and stability to the state. The state’s economic future is bright for businesses and individuals alike.”
Zions Bank provides the CAI as a free resource to the communities of Utah. The monthly CAI summary reports are released at a monthly press conference, coinciding with The Conference Board’s national CCI release date. The reports are available online at www.zionsbank.com/cai. Analysis and data collection for the CAI are done by The Cicero Group.