Contentious politics, rising gas prices impact consumer confidence, report says

Contentious politics, rising gas prices impact consumer confidence, report says

(Kristin Murphy/Deseret News)


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SALT LAKE CITY — The Zions Bank Utah Consumer Attitude Index decreased 6.4 points to 109 in April. Despite the declines, the index sits 3.4 points higher than a year ago. In comparison, the national Consumer Confidence Index fell 1.9 points to register at 94.2.

Slightly more negative perspectives regarding both the present circumstances of the economy and its future led to the decline, explained Zions Bank economic adviser Randy Shumway.

Speaking at a monthly news conference, Shumway said recent political wrangling could be the likely culprit for the minor decline in consumer optimism.

"We had a presidential primary in our state that was uniquely acrimonious," he said. "Despite the improvements in the economy, despite a stronger labor market, despite improvements in average hourly earnings, we saw a decrease in overall confidence.

"We had a number of presidential candidates telling us things are really, really bad, and therefore we should elect them to make it better, even though the macroeconomic trends are positive," Shumway said.

The Present Situation Index — a subindex measuring consumer sentiment about current economic conditions — dropped 10 points since last month but remains 4.1 points higher than this time last year, he said.

Additionally, expectations for the next six months also declined, falling 3.9 points in April due to a more negative outlook on future business conditions, Shumway said.

Another contributing factor to the dip in confidence, he said, was increasing fuel costs.

Despite rising this month, gas prices still remain lower than they have been at this time of year compared with the previous three years, Shumway said. The average gasoline price in Utah registered at $2.26 per gallon, while the national average has reached $2.14.

Most consumers expect gasoline prices to continue rising over the next 12 months, he said. These expectations come as oil prices have risen fairly steadily through the past three months, Shumway said.

Current Brent crude oil futures are trading for about $45 per barrel, compared with $41 a month ago and $70 a year ago, he noted.

The Utah Consumer Attitude Index is based on a representative sample of 500 Utah households. The monthly survey is conducted by the Cicero Group and has a confidence interval of 4.4 percent at a 95 percent confidence level. The data collected are compared with both local and U.S. data from previous months to identify key consumer sentiment trends in the state.

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