Estimated read time: 3-4 minutes
- Utah economists highlight challenges consumers face amid economic indicators like inflation, others.
- Phil Dean notes affordability issues despite Utah's strong economic performance in recent years.
- Housing costs, health care expenses and income disparities contribute to the state's economic challenges.
SALT LAKE CITY — Economic indicators like consumer sentiment and inflation can sometimes seem like a riddle, telling us one thing but looking and feeling different in day-to-day life, and based on individual circumstances.
Utah economists on Wednesday took turns addressing that feeling during a panel discussion hosted by the Kem C. Gardner Policy Institute on how consumers are really faring in today's economy.
Phil Dean, chief economist and director of research at the institute, called the topic timely.
"In recent years, Utah's economy has performed well, but at the same time, there are challenges that many out there experience, as affordability weighs on people's minds and pocketbooks," Dean said.
Consumer disconnect
In Utah and the U.S., consumer sentiment modestly increased in January. But there's still a disconnect among consumers.
Zion's Bank chief economist Robert Spendlove described the disconnect using a term he called the "K-shaped economy."
"Looking at consumer sentiment by income ... upper income over 100,000, they're feeling OK. Middle income is starting to get squeezed. And we're really seeing that pressure in the lower income — under $50,000 ... is really struggling," Spendlove said.
Inflation is also a tricky indicator.
The latest economic data shows inflation was down nationally from 2.7% in December to 2.4% in January. But that doesn't mean much when getting groceries or filling up gas tanks.
Spendlove explained that consumers are usually focused not on the monthly change but the overall impact of the increase in the price level.
For groceries, prices are up 26% in the last five years, Spendlove said.
Housing
Another big piece of the affordability pie, especially in Utah, is the cost of housing. For many, the dream of homeownership simply feels out of reach.
Dejan Eskic, senior research fellow at the institute, painted a somber picture for the state, saying that the last time housing was considered affordable in Utah was the turn of the century.
"Ever since then, we've been slowly trending up. We had the great financial crisis happen. But then, since 2010, 2011, we've been on a drastic upward streak. And by 2022, our (average) house price was six times our (average) household income," Eskic said. "In just a matter of two decades, our prices have outpaced our income."
It's showing, too.
Utah's homeownership rate in 2024 was 68.3%, its lowest point since 1986, when it was at 68%, according to data from the U.S. Census Bureau.
Health insurance
A sometimes overlooked but crucial aspect of affordability and how someone is able to respond to economic changes can be found in health insurance costs.
In 2024, 60% of Utah's population was enrolled in employer-based health care coverage, explained Melanie Beagley, senior health research analyst at the institute.
Additionally, about 1 in 10 is enrolled in Medicare, another 1 in 10 is covered by Medicaid, and the uninsured rate as of 2024 was just over 8%, which is near the national average, Beagley said.
"Utah does definitely rely on the marketplace quite significantly when compared to the U.S.," Beagley said. "What we see over time is consistent moderate growth in health care costs when it comes to premiums and deductibles in the employer market."
Another way to examine affordability is to look at the "health care cost burden," defined as households that spend 10% or more of their income on health care costs, including monthly premiums.
In Utah, over 18% of households are spending 10% or more of their income on health care in a year, 12th highest in the nation and 3% higher than the national average.
