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SALT LAKE CITY — Utah consumers are especially upbeat about the state of the local economy, a recent report shows.
The Zions Bank Utah Consumer Attitude Index climbed above the 110 mark for the first time this month, rising to 116.8 in November due to flourishing business conditions and job growth.
The index saw a 7.1-point increase over last month and currently sits 23.1 points higher than it registered one year ago, indicating strong confidence heading into the holiday shopping season, said Randy Shumway, Zions Bank chief economic adviser.
A score above 110 indicates that Utah is rising above economic recovery into prosperity, Shumway explained. Utah is bucking the trend compared with the national Consumer Confidence Index, which decreased 5.4 points to 88.7 from October to November, he said.
“People are feeling better about their prospects, (making them more) willing to spend,” Shumway explained. “Their spending helps bolster retailers and others, which creates a positive (economic) cycle.”
Much of the recent economic improvement to falling transportation costs are due to decreasing petroleum prices in the Middle East, he said.
Brent crude oil, the benchmark for oil prices worldwide, fell to $79 per barrel this month, down from prices just over $100 just three months ago, Shumway said. The decline has gasoline prices expected to continue falling in the short term due to continued shale oil production in the United States, he explained.
Gas prices typically decrease in the winter months each year, but recent drops in price have been sharper than usual, Shumway said.
Nationally, the average price per gallon for gas in October was $3.35 — down from $3.55 in September. Currently, gas prices in Utah are approximately $3.06 per gallon, while prices nationwide are $2.85 per gallon.
Economically speaking, low gas prices typically translate into lower costs and higher demand for consumer goods, which encourages producers to hire more workers, Shumway said. Additionally, low unemployment rates usually result in better pay for job seekers — all of which creates increased optimism among consumers, he said.
Last week, the Zions Bank Wasatch Front Consumer Price Index decreased 0.3 percent from September to October. The index has risen 0.6 percent over the past year, Shumway said. The national Consumer Price Index, released by the Bureau of Labor Statistics, also declined 0.3 percent for the period and has increased 1.7 percent over the past year, he added.
Conflict among our nationally elected officials in Washington, D.C., (in 2013) diminished what could have been natural confidence among consumers.
–Randy Shumway, Zions Bank chief economic adviser
While the Consumer Attitude Index rose based on the improving economy, Shumway said the trend should continue into early next year. However, consumer attitudes in Utah and nationwide could change depending upon the actions of the new Congress, he said.
“Conflict among our nationally elected officials in Washington, D.C., (in 2013) diminished what could have been natural confidence among consumers,” Shumway said.
If the partisan bickering escalates in 2015, then consumer attitudes could be negatively affected, he added.
Currently, though, confidence is strong and should remain high in the short term, Shumway said.
Meanwhile, the Zions Bank Present Situation Index — a measure of consumer attitudes regarding current economic conditions — rose 5.5 points to 117.9 compared with the national Present Situation Index, which fell 3.1 points to 91.3.
The Zions Bank Expectations Index, an indication of how consumers feel about economic conditions six months from now, jumped 8.2 points to 116.1, while the national index declined 6.8 points to 87.0.
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 has a confidence interval of plus or minus 4.38 percent at a 95 percent confidence level. The current information is compared with both Utah and U.S. data from previous months to identify key consumer sentiment trends in the state.
