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The month of December was a boon for consumer confidence in Utah, specifically because of an uptick in optimism about the trajectory of household income for 2014—which spurred a big rise in spending during the holiday season.
The Zions Bank Utah Consumer Attitude Index increased by 2.3 points to 96.1 from November to December. This increase came on the heels of November’s record-setting jump of 15.7 points and set an all-time high for the month of December since the Consumer Attitude Index began in 2011.
The Utah Consumer Attitude Index corresponds to the national Consumer Confidence Index, which increased by 6.1 points from November to December and now sits at 78.1 points.
Randy Shumway, CEO of The Cicero Group/Dan Jones & Associates and economic adviser to Zions Bank, said 70 percent of the state’s economic activity is driven indirectly by consumer spending.
“One-fifth of all consumer spending occurs during the holiday season,” he said. “As retail spending goes, so goes our economy.”
The 2013 holiday season was an impressive one, Shumway said.
“Utahns are confident for good reason,” he said. “Utahns believe today that 2014 will yield higher values for their 401(k) and home values. They also believe there will be [lower] unemployment and that their household income will increase.”
The percentage of Utahns expecting their household income to increase over the next six months jumped to 26 percent from 23 percent. Shumway said Utahns have good reason to believe this, specifically because the economy grew 4.1 percent during 2013’s third quarter.
“This is only the third time in eight years we’ve experienced that type of quarterly growth,” he said. “Unemployment is down to 4.3 percent. Much of that is seasonal work; however, that means more people had money to spend during the holiday season.”
Shumway said while final numbers for holiday spending won’t be tabulated until mid-January, early indications show holiday spending set record highs nationally in 2013, especially because major companies such as MasterCard and Amazon had record months in November and December.
Bill Sartan, co-owner of family-owned business Tutoring Toy in Foothill Village, agreed with Shumway. In the fourth quarter of 2013, his toy store experienced a large surge, with double-digit increases in both the number of transactions as well as the gross dollars passing through the business. On Christmas Eve, Sartan posted the store’s closing time as 3 p.m., but the store was so busy that it didn’t close until 6 p.m.
“It’s been a rough four or five years, but we’re looking forward to 2014,” Sartan said. “There’s still a little pull back from our customers, but certainly our fourth quarter would show that they are feeling better [about the economy].”
Both the local and national indices gauge the degree of optimism for the economy that consumers are expressing through their spending activities. National comparison enables consumers, businesses and policymakers to identify key economic trends in Utah. The state’s index is tabulated by The Cicero Group and Dan Jones & Associates, and is released monthly by Zions Bank as a community service to Utahns.