The Zions Bank Utah Consumer Attitude Index surpassed 110 for the first time this month, rising to 116.8 in November on flourishing business conditions and job growth.
The index experienced a 7.1-point increase from last month and is now 23.1 points higher than its level one year ago, showing confidence is strong heading into the holiday shopping season. A score above 110 indicates that Utah is rising above economic recovery into economic prosperity. Utahns are bucking the trend: the national Consumer Confidence Index® (CCI) decreased 5.4 points to 88.7 from October to November.
The Present Situation Index, which measures how consumers feel about current economic conditions, increased 5.5 points to 117.9 this month. The Expectations Index, the sub-index of the CAI that reflects how consumers feel about economic conditions six months from now, rose 8.2 points to 116.1 in November. Each index reached record highs this month.
Utahns’ confidence that current business conditions in Utah are good increased three points to 50 percent in November, which represents its highest level on record. Utah’s friendly business environment continues to attract businesses and venture capital to the state as demonstrated by recent findings published by the Associated Press that Utah cities received two of the top three spots for per-deal venture capital amounts. The current outlook on job availability also reached a high point this month at 40 percent, increasing one point from October.
Current business conditions and job availability were not the only indicators to increase from October to November. Beliefs that business conditions will be better six months from now increased ten points over the past month, rising from 24 percent to 34 percent. The percentage of Utahns who think the number of jobs available in their area will be higher six months from now also increased, jumping from 26 percent in October to 33 percent in November. Slightly more Utahns expect their household income to go up in the next six months, increasing from 30 percent in October to 31 percent in November.
The percentage of consumers who expect prices of homes like theirs in their community to increase over the next year increased from 57 percent in October to 64 percent in November, which shows promise for the housing market. According to the most recent CoreLogic Home Price Index Report, home prices in Utah actually decreased 0.5 percent from August to September but increased 5 percent since this time last year. Increasing expectations regarding home prices are a good sign for the housing market since increasing home prices equate to increasing value of individuals’ assets.
The percentage of those who expect gas prices to go up over the next year decreased7 points to 63 percent in November, which is likely a result of the recent decline in oil prices across the globe combined with seasonal lower prices. The average expected increase is 40 cents. Those who expect gas prices to fall expect the drop to be 28 cents on average.
Consumers expect inflation to increase slightly: despite statements of the Federal Reserve that interest rates will be kept low for a considerable time, 61 percent of Utahns expect interest rates for borrowing money to increase during the next 12 months, up from 57 percent last month, although the size of the expected increase was not measured. Likewise, the percentage of Utahns who expect a $1,000 investment in their 401K to be worth more than that a year from now increased but by a much smaller margin of 1 percent from October to November, putting the total percentage at 38.
Optimism about both the nation’s economy and the state’s economy is up this month. Those who think it is likely or very likely that the U.S. economy will improve during the next 12 months jumped from 21 percent in October to 30 percent in November. On a similar note, the percentage of Utahns who think the federal government is doing a good job of improving the overall economy of the U.S. increased from 7 percent in October to 10 percent in November. Those who think the state government is doing a good job at improving the economy increased from 37 percent to 42 percent.
“Consumer attitudes are exceptionally high going into the holiday season,” said Scott Anderson, president and CEO of Zions Bank. “Plentiful jobs and a good business environment equate to happy consumers during a season that can often be marked by financial stress for both consumers and for companies that rely on holiday sales to maintain their business.”