Consumer Confidence Remains High Despite Increase in Cost of Living Statewide
The Zions Bank Utah Consumer Attitude Index (CAI) increased 0.8 points in August to 115.
The Zions Bank Utah Consumer Attitude Index (CAI) increased 0.8 points in August to 115. Consumer confidence in Utah has registered above 110 since June last year, indicating that Utahns continue to be very optimistic about current economic conditions within the state, as well as optimistic about the future trajectory.
The overall CAI currently sits 3.5 points higher than its level 12 months ago. In comparison, the national Consumer Confidence Index® increased 2.9 points to 122.9 this month and is 21.8 points higher than it was at this same time last year.
Consumer attitudes remain high within Utah, largely due to the state’s robust job market which has been fueled by expansion within the technology and housing sectors. However, many residents may be noticing that the cost of living within the Beehive State is rising, a possible by-product of this recent economic expansion.
According to U.S News, Utah’s economy ranks 29th in total affordability, a calculation based on cost of living and housing affordability. Housing prices within Utah have increased by more than 10 percent since June of last year. Although increases in housing prices may be leading to higher costs within the state, there is an economic benefit to their growth.
“Expansion within the housing market is a good sign that the economy has recovered since the recent economic downturn,” said Scott Anderson, President and CEO of Zions Bank. “Home equity is a large share of many Utahns’ net worth, and as homes become more valuable, home owners should see their wealth continue to increase.”
Although many people within the state have benefited from growth within the housing market, many Utahns are also recognizing that the overall cost of living within the state is higher than it was just a year ago. In the most recent month report, the Zions Bank Wasatch Front Consumer Price Index showed a 3.4 percent year over year increase in cost of living for residents.
With the new school year beginning this month, many residents are feeling the effects of increased prices on goods associated with students going back to school. According to the August CAI survey, 32 percent of Utahns plan on spending more on school supplies this year relative to last year.
The positive news is that despite the recent rise in statewide prices, consumers are confident that the job market will continue to expand, providing higher levels of household income in the future:
- Fifty-six percent of residents believe that jobs are plentiful within the state, up 7 percent from a year prior
- Forty percent of Utahns believe that their total household income will be higher six months from now, up 5 percent from a year earlier
Utahns also are more optimistic about efforts of local officials to improve the statewide economy, and there is increasing optimism about the national economy as well:
- Forty-seven percent of residents believe the Utah state government is doing a good job of taking steps to improve Utah’s overall economy, up 3 percent from August last year
- Thirty-eight percent of residents believe it is likely that the U.S economy will improve during the next 12 months, up 17 percent from August 2016
“Consumer attitudes remain high within the state despite the moderate price increases that we have witnessed in recent months,” said Randy Shumway, chairman and partner of Cicero Group. “As long as the Utah job market continues its current rate of expansion, and I see every indication that it will, there is no reason why consumers shouldn’t remain optimistic about the future of the statewide economy.”
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. Analysis and data collection for the CAI are done by Cicero Group, a premier market research firm based in Salt Lake City. The September CAI will be released during a press conference at a local business at 10:30 a.m. on September 26, 2017.
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