Zions Bank experts predict long economic recovery

SALT LAKE CITY — The economy is in for a long recovery, according to Zions Bank financial experts.

The Wasatch Front Consumer Price Index rose by 0.1 percent in September, according to information issued Friday by Zions Bank, which provides the index as a public service.

The consumer price index along the Wasatch Front rose 1.2 percent for the past 12 months, which is higher than the national consumer price jump of 1.1 percent during the same time.

The report released Friday noted comments made that morning by Federal Reserve Chairman Ben Bernanke, in which he said the central bank was poised to take additional action to fight low inflation and high unemployment. Bernanke previously said, "Economic conditions provide little scope for reducing deficits significantly further over the next year or two."

The report accompanying the index interprets that to mean that there will be additional asset purchases by the Federal Reserve to stimulate growth and hike inflation.

The monthly change in the Wasatch Front Consumer Price Index was led primarily by increases in housing costs, which went up by 0.5 percent. This was spurred largely by rent increases in the area, according to the report.

In addition, education costs went up 0.5 percent, which in large part was due to hikes in BYU Independent Study tuition. The report said "it is common" to find slight increases for tuition at this time of year.

Transportation costs, however, went down along the Wasatch front by 0.6 percent, reduced largely by lower costs for airline tickets.

"The CPI is a barometer of the economic climate," said Zions Bank President Scott Anderson. "The low but stable rate of inflation over the last few months suggests we have a long way to go to full recovery."

Unemployment in Utah stayed at 7.4 percent, which is below the national average.

"Continued high unemployment is indicative of the slow recovery and is often correlated with low inflation," the report said.

Single-family home sales in Salt Lake County dropped by 7 percent between August and September, with 633 homes sold in August compared to 586 in September.

Interest rates are quite low, but financial experts suggest the lagging home sales could be due in large part to the end of the homebuyer tax credit.

Utah also has the seventh-highest foreclosure rate in the country.

e-mail: lindat@desnews.com