Higher Fuel Prices Slightly Dent Optimism but Overall Confidence Remains Strong
SALT LAKE CITY, Utah; March 27, 2012 — In March, the Zions Bank Consumer Attitude Index (CAI) decreased 4.9 points to 79.9.
The U.S. Consumer Confidence Index® (CCI) decreased 1.4 points to 70.2, creating a 9.7 point difference between the two indexes.
In March, Utahns’ confidence in the economy received a small dent as fuel prices continued to rise. Today, Utahns are paying approximately 23 percent more for regular gasoline in the state compared to just three months ago. Despite rising fuel costs, consumers’ confidence toward the economy remains strong. Most importantly, consumers’ attitude toward the local labor and housing markets continues to be optimistic. Most economists cite sustained confidence in the labor and housing markets as a key indicator of a healthy economic recovery.
The Zions Bank Present Situation Index, which is a snapshot of current business conditions and employment, decreased 6.3 points to 54.9. Nationally, the CCI Present Situation Index increased 4.6 points to 51. The Zions Bank Expectations Index for six months from now — which is the best predictor of the direction of consumer spending — decreased 3.9 points to 96.6, while the CCI Expectations Index decreased 5.4 points to 83.
Consumer attitudes toward the labor market held strong in March, indicating that Utahns are becoming more confident in the local recovery. Twenty-eight percent of Utahns, compared to 15 percent just six months ago, believe there will be more jobs in the market during the next six months. The more positive perception signals that Utahns are becoming more optimistic in their ability to find a job. Furthermore, job assurance has also risen. Over the last 12 months, confidence in job stability has risen from 56 percent to 71 percent.
Consumer optimism toward the housing market has also increased recently as economic indicators show signs of improvement. In a recent report from the Utah Association of Realtors, Utah home sales jumped in January for the eighth consecutive month, helping support the idea of a recovering housing market. In March, 80 percent of Utahns indicated that the price of homes would likely stay the same or increase during the next 12 months, compared to 62 percent just six months ago.
While rising prices at the pump have many Americans concerned, recent government data shows that consumers are not closing their wallets. In a report by the Commerce Department, retail sales rose 1.1 percent in February, the largest monthly increase since September 2011. U.S. automakers reported having the best annual sales pace in four years in February, 1.6 percent. Higher fuel prices are still a threat to consumer confidence, but recent reports indicate that spending habits have not been weakened.
“This month, the Zions Bank Consumer Attitude Index revealed that consumer optimism has not been lost, despite the rising cost of fuel,” said Zions Bank President and CEO Scott Anderson. “Our local economy has shown significant signs of improvement over the last 12 months and residents have taken notice. The state’s falling unemployment rate and business-friendly environment has helped propel confidence among Utahns, outweighing the negative impact of higher gasoline prices.”
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 April CAI will be released during a press conference at a local business at 10:30 a.m. on April 24, 2012.
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 18 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.