SALT LAKE CITY —Consumer confidence remains higher in Utah than the nation as a whole, driven largely by a lower unemployment rate and diversity in the economy.
During the past year, prices have increased by 3 percent in the Wasatch Front and increased by almost 1 percent in February, according to the Zions Bank Consumer Price Index. The main contributor to the inflation was a 3.3 percent jump in transportation prices.
Gasoline prices increased on average 36 cents per gallon in February, up 13 percent from the previous month. Because the average Utahn spent 18 cents of every dollar on transportation, this had a big effect on inflation in Utah, Randy Shumway, Chief Executive officer of The Cicero Group, said.
The Zions Bank Consumer Attitude Index dropped by one point in March. For the past four months in Utah, consumer confidence has remained steady.
"As consumers feel, so they spend. About two-thirds of production can be traced to consumer spending," Shumway said.
Confidence is low nationwide, Shumway said, mainly because national financial news has been conflicting. Reports of peak stock markets, decreasing unemployment and improved retail and housing sales are offset by mandatory federal spending cuts, government gridlock in Washington and the European financial crisis.
On the other hand, attitudes in Utah have stayed between 15 and 20 percent higher than national levels. This is due in part to a 5.2 percent unemployment rate, compared to the 7.7 percent national rate, and a state economy growing at a four percent annual rate.
Shumway attributes the positive financial situation to Utah's diverse economy that does not rely on one industry, which means a negative shift in one sector does not mean an overall downward trend.Comment on this story
"Our state has been fiscally prudent for so many years, we aren't' making these incredibly hard and irrational cuts," Shumway said. Because of this, Utah can invest in education, which benefits both the current and future economy, he said.
The Present Situation Index, which measures consumer confidence in present business and employment opportunities, rose slightly, and rose 10.6 points in the past six months.
However, the Expectations Index, which measures consumers' anticipation of the future economy, dropped 2 points in March and a total of 20.7 points in the past six months.
Zion's Bank released this month's index at Pierre's Bakery in Salt Lake City.