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The Zions Bank Consumer Attitude Index (CAI) increased significantly from August to September rising 8.1 points. At 85.0 the CAI is at its highest levels since April of this year. The U.S. Consumer Confidence Index (CCI) also increased significantly in September by 9.0 points to 70.3, resulting in a difference between the two indices of 14.7 points.
After three months of relative stability, the CAI experienced a significant jump in September. The end of summer has traditionally been a time of economic optimism for consumers, as the Utah index revealed last year when it increased by 10.9 points from August to September of 2011. But the recovering housing, labor and stock markets also contributed heavily to this month’s rebound. Even modest increases in home values, the stock prices, and employment rates can positively affect consumer confidence.
Consumer confidence increased in most categories that constitute the CAI. The Zions Bank Present Situation Index — an assessment of confidence in current business and employment conditions — increased 11.4 points to 69.3. While the Zions Bank Expectations Index — an estimate of consumer confidence in the economy six months from now — increased 6.0 points to 95.6.
Thirty-one percent of Utahns believe that current business conditions in their area are “good,” which represents the largest proportion since May of this year. Moreover, 13 percent of consumers described the number of jobs currently available in their area as “plentiful” — not an overwhelming percentage, but the highest levels in the history of the Zions Bank CAI.
The relative optimism Utahns had regarding the current situation translated into a positive outlook for future economic conditions. Thirty percent of consumers identified that they believe business conditions will be better in six months, and 26 percent think that there will be more jobs available over the same period. Both indicators increased from August and are up 9 and 12 percentage points, respectively, from last September.
“There have been some meaningful economic developments over the last four-to-six weeks in the state,” said Zions Bank President and CEO Scott Anderson. “Utah currently has the ninth lowest unemployment rate in the United States, which is a testament to the resiliency of the citizens and businesses of this state. Utah consumers have good reason to be more confident in the economy, especially relative to the rest of the nation.”
While increases in the CAI signify positive economic momentum, it is expected that the Index will continue to fluctuate throughout the rest of the year. The recovery is still fragile, and uncertainty will continue to play a large role in consumer attitudes going forward. Political instability and softening consumer demand internationally, in particular, have the potential negatively influence the recovery and derail consumer confidence.
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/Dan Jones & Associates, a premier market research firm based in Salt Lake City.