Utah consumers bullish on current economy, but bearish on the future

Utah consumers believe strongly in the state of the current local economy, however that optimism is tempered by some trepidation about what lies ahead in the coming months, according to results of a new survey. | Adobe Stock

SALT LAKE CITY — Utah consumers believe strongly in the state of the current local economy, however that optimism is tempered by some trepidation about what lies ahead in the coming months, according to results of a new survey.

The Zions Bank Utah Consumer Attitude Index declined slightly this month — down 0.1 point to register at 113.1 in August. Year over year, the index decreased by 1.8 points. Comparatively, the national Consumer Confidence Index slipped 0.7 point to register at 135.1 for the month.

Data collected from the survey of 500 Utah households showed the Utah Present Situation Index — a subindex of current economic sentiment — rose by 7.8 points to register at 132.7 points during August. The reported indicated that consumer confidence in job availability was the main driver of the increase. This month, a total of 65% of Utahns felt that jobs were plentiful — up 4 percentage points over July and the second-highest number recorded since Zions Bank began measuring Utah consumer attitudes on the economy in 2011.

To the contrary, the Utah Expectations Index — a measure of consumer sentiment six months from now — fell 5.4 points to register at 100.1 points. Many Utah consumers surveyed expressed more pessimism about where business conditions and job availability are likely to be six months ahead.

“Utahns are feeling better about jobs and the current business climate, but they’re feeling more uncertain about where the economy is going to be six months from now,” explained Chad Berbert, principal with Cicero Group — economic advisers for Zions Bank. “They think the job market is going to tighten and they think that overall business conditions will be less optimistic than where they’re at now.”

He attributed some of the pessimism to news reports of tariffs imposed by the Trump administration, global trade upheaval and current Federal Reserve policy.

“That’s contributing to uncertainty,” he said.

Despite some Utahns feeling worse about future business conditions and employment prospects, the lack of optimism did not dampen their feelings about their own earning potential, with 36% saying they believe their household income will grow over the next six months. Just 4% said their income would decline over that same six-month period.

“Utahns are feeling pretty confident about their personal financial situation, but have some concern about the broader economy and what might happen over the next six to 12 months,” he added.

Berbert noted that job growth in Utah is quite strong, which is indicative of a robust business climate in the Beehive State with companies doing well and adding more jobs to their payrolls.

Meanwhile, the ongoing the U.S. trade conflict with China and its impact on the American economy continues to be an important concern for consumers, according to a local analyst.

“As we hear talk about the possibility of economic turbulence, it is important to remember the fundamentals. Job growth in Utah remains strong, as does income growth,” said Randy Shumway, chairman and partner of Cicero Group. “Exogenous economic shocks may affect asset values, but at least for the near term they are not expected to affect the positive employment conditions here in Utah, which will buttress continued strong consumer spending in the state.”

from Deseret News https://ift.tt/2NDn5ZQ