SALT LAKE CITY — Discord in Washington, D.C., significantly dampened consumer sentiment in the Beehive State, a new report showed.
After reaching an all-time high last month, the Zions Bank Consumer Attitude Index decreased 14.6 points to 78.1 from September to October. The decline was the sharpest drop recorded since the index’s inception in January 2011.
In comparison, the national Consumer Confidence Index decreased 2.1 points to 79.7.
The government shutdown understandably weighed heavily on consumer attitudes this month, said Zions Bank economic adviser Randy Shumway.
The amount of people who feel business conditions in their area are bad rose from 9 percent to 14 percent, and those who think jobs in their area are plentiful decreased from 22 percent to 17 percent, the monthly report indicated.
The Zions Bank Present Situation Index — an assessment of confidence in current business and employment conditions — declined to 78.5 — down 14.4 points. The government shutdown also had a significant impact on future expectations for the local economy, Shumway said.
The Zions Bank Expectations Index — an estimate of consumer confidence in the economy six months from now — fell 14.7 points from September to October and currently sits at 77.8 — the lowest point since 2011.
On the national level, 14 percent of Utahns believe the U.S. economy will likely improve over the next 12 months, down from 21 percent in the prior month. Additionally, 61 percent of people surveyed believe the U.S. economy is unlikely to improve over the next 12-month period, up from 43 percent in September.
Not surprisingly, the government shutdown impacted Utahns’ perception of the federal government’s economic policy, Shumway said.
Utahns who believe the federal government is doing a poor job with its economic policy reached an all-time high of 76 percent — up from 60 percent last month, while Utahns who believe the federal government is doing a good job with its economic policy fell to 4 percent from 7 percent.
In contrast, the report showed that Utahns continue to have confidence in state leaders, with those who believe the state government is doing a good job with its economic policy rising slightly to 37 percent from 36 percent the previous month, and those who think the state government is doing a poor job with its economic policy stood at 13 percent — 63 percentage points lower than the same measure for the federal government.
Although consumer confidence plummeted this month, the drop is almost certainly attributable to the government shutdown, Shumway said. Other broad measures of consumer confidence in areas such as housing and interest rate expectations remained relatively positive, he added.
More than half — 55 percent — of Utahns still expect home values to climb over the next 12 months. Those who expect interest rates to increase over the next year continues to fall and currently sits at 68 percent, down 8 percent over the past three-month period.
With the state’s stable housing market, relatively low unemployment rate and a reopened federal government, consumer confidence will likely rebound over the next few months, Shumway said.