December 18, 2013

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Article

Utah Prices Increased 1.3 Percent in Past Year

Zions Bank Consumer Price Index

December 18, 2013

Salt Lake City — The Zions Bank Wasatch Front Consumer Price Index (CPI) decreased 0.1 percent from October to November on a non-seasonally-adjusted basis. Over the last twelve months, prices have increased in Utah by 1.3 percent. The national Consumer Price Index, released by the Bureau of Labor Statistics, fell 0.2 percent from October to November on a non-seasonally-adjusted basis and has increased 1.2 percent over the past twelve months. 

Transportation costs (down 2.1 percent) have now fallen for five straight months as gasoline prices in Utah continue to plummet. At the end of November, the average price for a gallon of gasoline in Utah sat around $3.08, compared to the national average of $3.26. According to AAA, gasoline prices in Utah have continued to fall in December as well, with a current price of $3.04 per gallon, compared to the national average of $3.22. As the New Year begins, Utahns could see gasoline prices continue to fall, given that prices historically trough in January. To start 2013, prices dropped to a low of about $2.95 in January before increasing for five consecutive months and peaking at about $3.75 in June.

Offsetting the savings consumers are seeing at the pump to an extent, rental car and airfare prices jumped last month. Increasing airfare costs and rental car prices, along with falling gasoline prices, are likely pushing more Utahns who plan to travel during the holidays to drive this year rather than fly. This trend is playing out nationally, as well. According to TripAdvisor’s annual holiday travel survey, 53 percent of holiday travelers are planning to drive this year, up five percentage points from 48 percent last year, as the national average for airfare has increased from $401 in 2012 to $436 in 2013 while gasoline prices are down significantly year-over-year.

Utility prices in Utah rose 2.2 percent from October to November. Both electricity prices (up 2.0 percent) and natural gas prices (up 7.6 percent) jumped in November as many utility companies switched residents from their summer rates to their winter rates. Demand for natural gas is lowest in spring and fall months, but utility companies typically charge a less expensive summer rate from April to October and a more expensive winter rate from November to March.  This switch, and ensuing rate increase, is consistent with past years, but consumers may notice that the winter rate jump is higher than it has been in years past. The U.S. Energy Information Association (EIA) predicts that more than 90 percent of the 116 million U.S. households will pay more for heat this year due to rising natural gas, electricity, and propane prices. More specifically, the EIA expects households using natural gas for heat will pay about $80 more this winter than last winter.

Food prices also rose in November. Food at home increased 0.9 percent after falling the past two months, while food away jumped 1.1 percent as the price of full-service meals rose ahead of the holiday season. Recreation prices increased 0.5 percent due to rising cable TV and video service prices. Prices for education and communication services increased 0.4 percent from an increase in the cost of personal telephones. Clothing prices fell 0.2 percent in November after increasing in the two prior months. Housing prices fell modestly, down 0.1 percent, primarily from a decrease in hotel rates. Prices for other goods and services and medical care fell 0.5 percent and 0.1 percent, respectively.

“Falling gasoline prices will give Utahns some much needed discretionary income, especially in the midst of the holiday spending season,” said Scott Anderson, Zions Bank president and CEO.  “An unexpected bump in spending during this critical season for retailers could be exactly what we need to propel our economic recovery to new heights and end the year on an extremely positive note.”

Analysis and data collection for the Zions Bank CPI and the Zions Bank Consumer Attitude Index are provided by the Cicero Group.  The Cicero Group is a premier market research firm based in Salt Lake City.  The Zions Bank Utah Consumer Attitude Index will be released December 31, 2013.

Zions Bank is Utah’s oldest financial institution and is the only local bank with a statewide distribution of branches, operating 101 full-service offices.  Zions Bank also operates 26 full-service branches in Idaho.  In addition to offering a wide range of traditional banking services, Zions Bank is also a leader in small business lending and has ranked as the No. 1 lender of U.S. Small Business Administration 7(a) loans in Utah for the past 20consecutive years.  Founded in 1873, Zions Bank has been serving the communities of Utah for 140 years.  Additional information is available at http://www.zionsbank.com/">www.zionsbank.com.

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