Utah Consumers Brighter about Current Conditions, But Worry about Inflation
SALT LAKE CITY, Utah; May 31, 2011 — In May, on a seasonally adjusted basis, the Zions Bank Utah Consumer Attitude Index (CAI) fell to 70.7, a decrease of 1.1 points compared to April 2011. The national Consumer Confidence Index® (CCI), as reported by The Conference Board, showed a decrease of 4.2 points to 60.8. An index of 115 or higher is indicative of strong economic growth.
Utahns are more optimistic about current economic conditions than the rest of the nation. The CAI’s Present Situation Index, a snapshot of current business conditions and employment, increased (4.2 points) to 46.9; compared to the national CCI Present Situation Index at 39.3. The Expectations Index, a proxy for consumers’ expected changes in business conditions, jobs, and, personal income fell to 86.5 in Utah, a 4.8 point decrease from April. The national CCI Expectations Index decreased 4.8 points to 75.2.
The Zions CAI measures the level of confidence consumers place on both the present and future economic conditions in the state. Since January, the CAI Present Situation Index has increased 21 percent, revealing that Utahns are more confident in economic conditions today than they were at the start of the year. Contributing to Utahns’ brighter outlook is a falling state unemployment rate (currently 7.4), six months of expanding payrolls nationwide, and a recovering stock market.
Although fuel tensions have stabilized, the majority of consumers (80 percent) still believe gasoline prices will increase over the next 12 months, a nine-point decrease from last month. Based on 369 responses, consumers believe the average price of regular gasoline will increase by $0.45 over the next 12 months in Utah.
Six out of ten consumers (64 percent) believe their household income is unlikely to keep up with the rate of inflation in the next two years. However, recent positive economic news has bolstered consumer outlook toward their job stability. In May, 64 percent of consumers (61 percent in April) believed it was unlikely that they would lose their job. Moreover, consumers’ outlook toward home prices remained positive, increasing three percentage points from the month prior. Seventy-four percent (71 percent in April) believe home prices will remain the same or increase over the next 12 months.
Three out of five consumers (59 percent) believe interest rates will rise over the next 12 months. Inflationary concerns remained unchanged in May, showing that 97 percent of Utahns believe consumer good prices will increase or stay the same during the next 12 months.
Utah consumers’ appraisal of both state and federal government increased positively in May. Forty-one percent of consumers (39 percent in April) believe the federal government is doing a fair/good job, while 79 percent of consumers have a similar assessment of the Utah state government.
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. The June CAI will be released at a press conference at a Salt Lake-area business at 10:30 a.m. on June 28, 2011.
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.