SALT LAKE CITY — Utah consumers' faith in the local economy remains relatively positive, a new report indicates.
The Zions Bank Consumer Attitude Index increased 1.1 points to 79.9 in February, while the national Consumer Confidence Index rose by 11.2 points to 69.6. While the 1.1-point increase in the index does not represent a significant change, the index has risen for three straight months — a sign that consumer sentiment in Utah is stabilizing after falling dramatically in November, said Zions Bank economic adviser Randy Shumway.
Utah consumer confidence has been steady in the face of sluggish fiscal policy negotiations in Washington, he said.
“In late December, the so-called “fiscal cliff” threatened to increase taxes excessively for all Americans, but Congress was able to reach a last-minute compromise that minimized the tax hikes,” Shumway explained. “Now, the U.S. government is days away from sequestration, which is a set of deep spending cuts that will dramatically decrease the budgets allocated to the departments of energy, state, defense, labor, transportation, justice and the National Institutes of Health.”
Local consumers seem to be more anxious than national consumers are about the effects that looming spending cuts may have on economic growth, he added.
The Zions Bank Expectations Index — an estimate of consumer confidence in the economy six months from now — lost 1.2 points in February, while the national CCI Expectations Index gained 13.9 points. The CAI Expectations Index for Utah now sits at 82.6 — 8.8 points higher than the national average.
Local consumers are generally frustrated with the actions of the federal government, the report states, with only 5 percent of Utahns indicating that the federal government is doing a “good job” implementing policies that will improve the economy.
“The lack of faith that consumers have in their political leaders has diminished their hope for future economic growth. Approximately one-half of Utahns think that it is unlikely that the U.S. economy will improve in the next 12 months,” Shumway said. In contrast, only 35 percent of Utahns believe that domestic economic growth was unlikely one year ago, he added.
The Zions Bank Present Situation Index — an assessment of confidence in current business and employment conditions — increased 4.6 points to a score of 75.8, the second highest score since the inception of the CAI in January 2011.
Nationally, the CCI Present Situation Index also increased month-over-month — by 7.1 points.
Utahns expressed growing positive sentiment toward the current labor market, with 17 percent of consumers stating that jobs in their area are “plentiful,” the report states.
The proportion of Utah consumers who identified that jobs are plentiful in their area increased nearly 3 percent from January and grew 6 percent year over year.