Public losing a little of its confidence in economy

Utah’s citizens are a little more nervous about the future, according to the Zions Bank Utah Consumer Attitude Index (CAI) for July released last week The index fell 1.2 points to 110.3 in July, leaving it five points higher than a year ago.

Utah’s citizens are a little more nervous about the future, according to the Zions Bank Utah Consumer Attitude Index (CAI) for July released last week The index fell 1.2 points to 110.3 in July, leaving it five points higher than a year ago.

The decline was driven by a drop in confidence in both present and future economic situations. In comparison, the national Consumer Confidence Index decreased 0.1 points from June to July and currently sits at 97.3.

Expectations for the next six months decreased 0.9 points in July due to a slightly more negative outlook on employment opportunities, as 13 percent of Utahns think there will be fewer jobs available in their area six months from now, a 2 percent increase since June. Utahns are also slightly less confident in their job security, as 78 percent believe they are unlikely to lose a job they want to keep, compared to 80 percent in June. Twenty-two percent of Utahns believe the U.S. economy will improve during the next 12 months, a 2 percent decline since June. Income expectations remained fairly steady, with 33 percent of Utahns expecting their household income to be greater six months from now, representing little change from June. Compared to June, more Utahns think business conditions in their area will be better in six months, rising from 28 percent to 29 percent in July. 

“Confidence in business conditions waned slightly this month on the heels of June’s sharp gains, possibly due to uncertainty surrounding last month’s Brexit vote,” said Scott Anderson, president and CEO of Zions Bank. “But markets have bounced back, and Utahns are generally optimistic that our state’s homegrown businesses will continue to thrive.”

The Present Situation Index, a sub-index of the CAI that measures how consumers feel about current economic conditions, fell 1.6 points from June but remains 4.5 points higher than it was this time last year. Utahns believe the general business environment is less favorable compared to June, with 6 percent of Utahns rating general business conditions in their area as bad — a 1 percent increase from June. Fifty-three percent of Utahns describe available jobs in their area as plentiful, marking a 3 percent increase since June and a 7 percent increase since last year.

Utahns are slightly less confident in their housing investments compared to June, as 65 percent of Utahns believe the price of homes in their communities will increase, down from 68 percent in June. Additionally, 40 percent of Utahns believe it is unlikely they will be able to retire and maintain their living standards, a 4 percent increase since June.

In spite of declines in these measures of confidence, Utahns are slightly more confident in the future market value of personal retirement savings, with 44 percent of consumers believing $1,000 invested in their 401(k) is likely to be worth more than $1,000 a year from now — a 2 percent increase from June.

Gasoline prices have continued falling recently, reaching a 12-year low for July due to abundant fuel supplies and declining crude oil costs. U.S. crude oil supplies are about 13 percent higher than a year ago, while gasoline stocks have increased to the highest-ever mark during the month of July. Average gasoline prices are approximately 56 cents less than they were a year ago.

Satisfaction with the steps taken by the federal government to improve the overall economy of the U.S. decreased slightly, with 12 percent of Utahns indicating belief that the federal government is doing a good job compared to 13 percent in June. Approval of the state government is relatively higher, with 45 percent of Utahns saying the state is doing a good job improving the overall state economy, representing a 6 percent increase from June. 

Zions Bank provides the CAI as a free resource to the communities of Utah. Analysis and data collection for the CAI are done by the Cicero Group, a market research firm based in Salt Lake City.