Utah Consumer Attitude Dips in December as Consumers Ponder Job Prospects

The Zions Bank Utah Consumer Attitude Index declined 7.5 points to 109.3 in December, returning to its September level after significant increases in recent months.

Consumers are more concerned about job availability, but attitudes are still quite high in Utah and indicate a strong economy. The index currently sits 13.2 points higher than its level one year ago. Consumers in Utah are more confident than consumers nationally: the national Consumer Confidence Index® (CCI) increased 1.6 points to 92.6 from November to December.

The Present Situation Index, which measures how consumers feel about current economic conditions, decreased 0.5 points to 117.4 this month. The Expectations Index, the sub-index of the CAI that reflects how consumers feel about economic conditions six months from now, dropped 12.2 points to 103.9 in December.

Utahns’ confidence that current business conditions in Utah are good increased two points to 52 percent in December, which surpasses last month’s record high of 50 percent. The current outlook on job availability declined 3 points this month, from 40 percent in November to 37 percent of Utahns believing jobs in their area are plentiful in December. While business conditions are good, there is slightly more hesitation about the employment situation in spite of little variance in actual employment rates. Utah’s employment rate remained steady at 3.6 percent from October to November. The Utah Department of Workforce Services’ November employment report released last week showed that employment in November grew by an estimated 3.3 percent annually, adding 43,400 jobs to the economy since last year.

Expressed sentiment that business conditions will be better six months from now decreased 6 points from November to December, dropping from 34 percent to 28 percent. The percentage of Utahns who think the number of jobs available in their area will be higher six months from now also dropped 6 points in December from 33 percent to 27 percent. Income expectations decreased the most from month to month, with those expecting an increase in their total household income in the next six months dropping from 31 percent in November to 24 percent in December.

In line with current gasoline price trends, fewer Utahns expect gasoline prices to increase in the next year, and the highest percentage on record expect prices to decrease. Fifty-seven percent of Utahns in December expect gasoline prices will increase over the next twelve months. The average estimate is that they will increase by 48 cents. Nearly a quarter—24 percent—expect gasoline prices to go down, with the average decline totaling 29 cents. Gasoline prices have been dropping steadily since July and are 24 percent lower than they were at this same time last year. Part of the decline in gasoline prices is due to seasonal price decreases that occur every winter. Gasoline prices have also been influenced by the steep decline in crude oil prices in recent months.

As economic price indicators continue to show slow increases in prices, consumers’ expectations have followed suit. Just over a third of consumers expect interest rates for borrowing money to stay the same. Interest rate trends have had little impact on the expectations of prices for consumer goods in general. Seventy percent of Utahns expect prices of consumer goods to increase, which is down 1 percent from November. Twenty-five percent of Utahns expect consumer goods prices to remain the same, which is down 2 percent in December. There was virtually no change in expectations of investment interest rates—38 percent of Utahns expect a $1,000 investment in their 401K to be worth more than $1,000 one year from now, which represents no change from November to December.

“Consumer attitudes about current business conditions are generally high and reflect positively on the holiday shopping season we have just experienced,” said Scott Anderson, president and CEO of Zions Bank. “While expectations are a little hesitant going into the new year, we can expect the momentum of an economically positive year to continue to propel us into a successful 2015.”