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Salt Lake City — The Zions Bank Consumer Attitude Index (CAI) increased 4.3 points to 92.6 from August to September, and now sits above 90 for the first time since the index began in January 2011. A CAI reading above 90 is a solid indicator of a healthy economy, demonstrating the marked improvement of Utah’s economy since the recession. For comparison, this month’s national Consumer Confidence Index (CCI) decreased 2.1 points to 79.7.
After consumer attitudes in Utah plateaued over the past few months, Utahns became more comfortable with the overall economic environment in September and pushed the CAI to its new all-time high. The Zions Bank Expectations Index — an estimate of consumer confidence in the economy six months from now — increased 8.3 points to 92.9 from August to September. The Zions Bank Present Situation Index — an assessment of confidence in current business and employment conditions —increased 1.6 points to 92.4. Both indices remain well above their national counterparts, which is in line with expectations given that Utah has a much lower unemployment rate, a stronger housing market, and a strong range of thriving businesses spread across several different industries.
The most significant change in the index this month was Utahns’ assessment of general business conditions in their area. In September, the percentage of Utahns who think business conditions are normal or good jumped 5 percentage points to 91 percent. As with other measures, this marks the first time in the CAI’s history that this percentage has been over 90 percent. Utahns also were more positive about the labor market in September than in August. Those who describe the available jobs in their area as plentiful increased to 22 percent from 20 percent, and those who describe the available jobs in their area as hard to get decreased from 25 percent to 23 percent. More Utahns think the number of jobs will increase in the coming months as well: those who think there will be more jobs in Utah six months from now increased to 26 percent in September from 24 percent in August. Importantly, 91 percent of Utahns also think their household income will increase or stay the same six months from now, compared to 89 percent last month. Consumer confidence, particularly with regard to household income expectations, is highly correlated with consumer spending and GDP growth. This month’s bump in local confidence corroborates the predictions of several economists who expect GDP growth to continue to accelerate for the remainder of 2013.
Although Utah’s housing market remains strong, the percentage of Utahns expecting home prices to increase dropped to 61 percent — the lowest percentage since March 2013. However, this is likely due to substantial price increases that have already occurred over the last few months, not a signal that consumers have less confidence in the housing market. According to Zillow, an online home and real estate market research firm, Utah home prices are up approximately 7 percent since the beginning of 2013 and 11 percent year-over-year, led by the Provo and Salt Lake City areas, with year-over-year gains of 13.9 percent and 13.6 percent, respectively.
“Utahns are becoming comfortable with the state of our economy,” said Scott Anderson, president and CEO of Zions Bank. “There are certainly still some threats to our continued economic progress, including the U.S. fiscal crisis and political gridlock in Washington, but we have been seeing encouraging signs across the state for months now. Hopefully this pick-up in consumer confidence will further accelerate consumer spending as well as our overall economic growth.”
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. The October CAI will be released during a press conference at a local business at 10:30 a.m. on Oct. 29, 2013.