Utah’s Consumer Attitude Index Falls as Future Expectations Drop
SALT LAKE CITY, Utah; April 26, 2011 — In April, on a seasonally adjusted basis, the Zions Bank Utah Consumer Attitude Index (CAI) fell to 71.8, a decrease of 6.1 points compared to March 2011. The national Consumer Confidence Index® (CCI), as reported by The Conference Board, showed a modest increase of 1.6 points to 65.4.
The CAI’s Present Situation Index, a snapshot of current business conditions and employment, increased slightly (1.1 points) to 42.7; compared to the national CCI Present Situation Index at 39.6. The Expectations Index, a proxy for consumers’ expected changes in business conditions, jobs, and personal income fell sharply to 91.3 in Utah, a 10.8 point decrease from March. The national CCI Expectations Index increased 1.3 points to 82.6, suggesting that the national uncertainty expressed last month is easing.
The CAI is a gauge of the degree of optimism that consumers express toward the state of the economy. In April, the CAI Present Situation Index held strong against the state’s rising gasoline costs. However, the sharp drop in the CAI Expectations Index reflects concern among Utahns that gasoline price increases will slow the state’s economic recovery. The majority of consumers (89 percent) believe gasoline prices will increase over the next 12 months, which is a one-point decrease from last month. Based on 395 responses, the average price of regular gasoline in Utah is projected to increase by $0.47 over the next 12 months.
More than half (57 percent) of consumers believe their household income is unlikely to keep up with the rate of inflation in the next two years. However, consumers are more optimistic toward their job stability (61 percent, compared to 52 percent in March). Consumers’ outlook toward home prices remained positive and unchanged from the month prior. Seventy-one percent believe home prices will remain the same or increase over the next 12 months.
Consumers believe inflation and interest rates are on the rise. For the first time this year, the proportion of consumers suggesting that interest rates will increase over the next 12 months rose from 60 percent last month to 63 percent in April. Additionally, 83 percent of consumers believe prices for consumer goods are likely to increase in the coming year.
Consumer opinion shows that the Utah State Government continues to outperform the Federal Government in regards to steps taken to improve the economy. Fifty-eight percent of Utahns believe the Federal Government is doing a “poor” job (56 percent in March), while only 22 percent of Utahns gave the same “poor” rating to the Utah State Government (19 percent in March).
Zions Bank provides the CAI as a free resource to the communities of Utah. The monthly CAI summary reports are released at a monthly press conference, coinciding with The Conference Board’s national CCI release date. The reports are available online at www.zionsbank.com/cai. Analysis and data collection for the CAI are done by The Cicero Group/Dan Jones & Associates, a premier market research firm based in Salt Lake City.
Zions Bank is Utah’s oldest financial institution and is the only local bank with a statewide distribution of financial centers, Zions Bank operates locations in communities throughout Utah and Idaho. In addition to offering a wide range of traditional banking services, Zions Bank is also a leader in small business lending and has ranked as the No. 1 lender of U.S. Small Business Administration 7(a) loans in Utah for the past 17 consecutive years. Founded in 1873, Zions Bank has been serving the communities of Utah for more than 135 years. Additional information is available at www.zionsbank.com.