SALT LAKE CITY, Utah; November 26, 2013 — The end of the government shutdown, combined with falling gasoline prices, has sparked the most significant upswing in consumer confidence in the history of the Zions Bank Consumer Attitude Index (CAI).
The CAI increased 15.7 points to 93.8 from October to November. For comparison, this month’s national Consumer Confidence Index® (CCI) slightly decreased, down 2.0 points to 70.4.
Twenty-four percent of Utah consumers think jobs in their area are plentiful right now, up from 17 percent last month; 27 percent expect more jobs six months from now compared to 22 percent in the month prior. Consumers also feel more secure in their current jobs, as 75 percent think they are unlikely to lose a job they want to keep over the next two years, up from 69 percent in the month prior. Consumers view business conditions more positively: 39 percent say business conditions are “good” right now, and 27 percent think business conditions will be even better six months from now, up from 36 percent and 21 percent, respectively.
Although the government has been reopened, Utahns are still hesitant to give the federal government much credit for its economic policy. The percentage of Utahns who say the federal government is doing a good or fair job with its economic policy is 29 percent, up from 23 percent last month. But excluding last month, that percentage is still at its lowest level since March, when the Sequester went into effect. Only 19 percent of Utahns think it is likely the U.S. economy will improve over the next 12 months, up from an all-time low of 14 percent last month but still well below the average level observed over the past three years.
Meanwhile, support for the state government continues to swell. Eighty-five percent of Utahns think the state government is doing a good or fair job with its economic policy, likely a reflection of Governor Gary Herbert’s willingness to open the national parks during the shutdown and the state’s relatively low unemployment rate and strong housing market.
Consumers are more optimistic about their home values and their 401ks as we enter the holiday spending season as well, an important measure since consumer perception of their personal household wealth is a major determining factor when it comes to discretionary spending. The percentage of Utahns who think their home values will likely increase over the next twelve months is 58 percent compared to 55 percent last month, and those who think their 401ks will likely increase jumped to 35 percent from 29 percent last month.
This month’s CAI showed Utahns are more apt to purchase major household items (e.g. furniture, refrigerators, televisions). Those who say they are likely to make a major purchase over the next 60 days increased to 23 percent from 21 percent last month. Utahns are also getting some relief at the gasoline pump lately, increasing their discretionary income. Most consumers think this is short lived, however, since 69 percent of Utahns expect gasoline prices to increase over the next 12 months.
“Although Washington still has a lot of work to do to regain consumer trust, a reopened federal government was clearly welcome news,” said Scott Anderson, president and CEO of Zions Bank. “While we were surprised by the rate at which consumers regained their confidence, we noted last month there was still plenty for consumers to be optimistic about in spite of the shutdown. A rebound in consumer confidence was critical, since a weaker-than-expected holiday spending season could disrupt our ongoing economic recovery.”
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 December CAI will be released during a press conference at a local business at 10:30 a.m. on December 31, 2013.
About Zions Bank
Zions Bank, a division of ZB, N.A., operates 122 full-service financial centers 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 consistently ranked as the No. 1 lender of U.S. Small Business Administration 7(a) loans in Utah for the past 23 years and Idaho’s Boise District for the past 15 years. Founded in 1873, Zions Bank has been serving the communities of the Intermountain West for more than 140 years. Additional information is available at www.zionsbank.com.