SALT LAKE CITY — After a major drop in confidence last month, consumers in the Beehive State have regained their faith in the local economy, a new report states.
The resolution of the federal government shutdown combined with falling gasoline prices sparked a significant monthly upswing as the Zions Bank Consumer Attitude Index rebounded strongly in November, reaching the highest level in its history.
The index jumped 15.7 points to 93.8 from October to November.
That was in stark contrast to last month, when the index fell 14.6 points to 78.1 from September to October. The decline was the sharpest drop recorded since the index’s inception in January 2011.
Nationally, this month’s U.S. Consumer Confidence Index declined slightly, dropping 2 points to 70.4.
“Consumer confidence returned to an all-time high this month,” explained Randy Shumway, Zions Bank chief economic adviser, speaking at a monthly news conference Tuesday. “It was the worst drop in the history of (the index) last month, and this was the biggest increase.”
Shumway explained that an index below 70 represents “economic troubles,” while an index ranging from 70 to 90 is indicative of a “gray zone” of ambivalence from consumers. An index from 90 to 110 represents “positive improvement” economically, he said, while an index above 110 means “things are humming along in the economy.”
Utahns are also getting some relief at the gasoline pump lately, increasing their discretionary income, Shumway said. The average price for fuel for the month registered at $3.12 per gallon, he said.
“Most consumers think this is short-lived, however, since 69 percent of Utahns expect gasoline prices to increase over the next 12 months,” Shumway added.
"Consumer confidence returned to an all-time high this month. It was the worst drop in the history of (the index) last month, and this was the biggest increase."
The Zions Bank Present Situation Index — an assessment of confidence in current business and employment conditions — increased 11.5 points to 90.1, compared with the national Present Situation Index, which decreased 0.6 points to 72.
The Zions Bank Expectations Index — an estimate of consumer confidence in the economy six months from now — climbed 18.5 points to 96.2, compared with the national Expectations Index, which decreased 2.9 points to 69.3.
The Zions Bank Consumer Attitude Index is based on a representative sample of 500 Utah households. The monthly survey is conducted by The Cicero Group and Dan Jones & Associates, with a confidence interval of plus or minus 4.38 percent at a 95 percent confidence level.
Nearly a quarter of Utah consumers believe jobs in their area are plentiful right now, up from 17 percent last month, the report stated. About 27 percent of people surveyed expect more jobs six months from now compared with 22 percent in the month prior.
Consumers also feel more secure in their current jobs, with 75 percent stating they are unlikely to lose a job they want to keep over the next two years — up from 69 percent the previous month, Shumway said.
Consumers view business conditions more positively, with 39 percent stating business conditions are “good” right now and 27 percent stating they will be even better six months from now — up from 36 percent and 21 percent, respectively, he added.
Although the government shutdown was resolved, Utahns were still reluctant to give the federal government much credit, Shumway said.
The percentage of Utahns who believe the federal government is doing a good or fair job with its economic policy was 29 percent, up from 23 percent in October, the report stated. Excluding last month, that percentage was still at its lowest level since March, when the sequester went into effect.
Just 19 percent of Utahns believe it is likely the U.S. economy will improve over the next 12 months — up from an all-time low of 14 percent last month, but still well below the average level observed over the past three years.