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Salt Lake City — The Zions Bank Consumer Attitude Index (CAI) increased 2.4 points to 99.2 from February to March, marking a fifth consecutive month of increases. For comparison, this month’s national Consumer Confidence Index (CCI) increased 4.0 points to 82.3.
Consumer attitudes have markedly improved over the last year, as the CAI is up 20 points year-over-year. Swelling confidence in business conditions led to this month’s increase.
Forty-one percent of Utahns think business conditions are good, compared to only 8 percent who think conditions are bad and 51 percent who believe conditions are normal. The percentage of Utahns who believe current business conditions are good has increased 12 points over the last twelve months, with an increase of another four percentage points from February to March alone.
Preventing the CAI from moving even higher are consumer expectations for both general business conditions and the labor market. Twenty-eight percent of Utahns think business conditions will be better six months from now, down three percentage points from February. Just 27 percent of Utahns believe the number of available jobs in their area will be higher six months from now, down from 29 percent last month and 34 percent in January. Declining expectations about the trajectory of the economy are not necessarily a negative indicator, as they may simply mean that more Utahns believe the economy has peaked and that it will not further expand or improve.
But Utahns are becoming more concerned about rising prices, and the subsequent impact rising prices may have on their income. Eighty percent of Utahns think prices for consumer goods in general will go up over the next twelve months, up from 73 percent in February. Consumers are becoming increasingly confident that gasoline prices will go up over the next twelve months as well, as 85 percent of Utahns think gasoline prices will be higher twelve months from now —a 14-percentage point increase from February. Those who think gasoline prices are going up expect an average increase of $0.41 over the next twelve months. At the same time, consumers are less confident that their household income will rise at a higher rate than inflation. Fifty-one percent of Utahns think it is unlikely their household income will increase more than the rate of inflation during the next two years, up from 46 percent in February and 42 percent in January.
Utahns are still largely much more optimistic than the rest of the nation. The Zions Bank Present Situation Index — an assessment of confidence in current business and employment conditions — increased 5.8 points to 99.3 from February to March, and now sits 18.9 points higher than the national Present Situation Index. The Zions Bank Expectations Index — an estimate of consumer confidence in the economy six months from now — increased marginally, up 0.1 points, from February to March and now sits at 99.1, which is 15.6 points higher than its national counterpart. These metrics almost certainly take into account current conditions in the state of Utah that help engender increased optimism and confidence. For instance, Utah’s unemployment rate sits at 3.9 percent, while the national unemployment rate is at 6.7 percent. Utahns also think our state government is doing a much better job managing the economy — only 34 percent of Utahns believe that the federal government is doing a good or fair job with its economic policy compared to 80 percent of Utahns who think the state government is doing a good or fair job with its economic policy.
“Utahns’ confidence in the economy has been trending upward for quite some time now,” said Scott Anderson, president and CEO of Zions Bank. “This should not come as a surprise to many, as our state economy benefits from low unemployment, a strong housing market, and a thriving business community. This year is off to a great start, and we expect the economic recovery to continue to move forward with vigor.”
Zions Bank provides the CAI as a free resource to the communities of Utah.