In the coming months, consumers in Utah … expect to see improvement in the labor market and with regard to personal earnings. —Randy Shumway, Zions Bank chief economic adviser
SALT LAKE CITY — The Zions Bank Consumer Attitude Index increased slightly from December to January, climbing 0.1 points to 96.2 and keeping the index at its highest level since its inception in January 2011.
The national Consumer Confidence Index increased 3.2 points to 80.7.
Although the index remained flat, substantial change in the two indices that compose the Consumer Attitude Index indicate consumers are feeling more optimistic about the future, according to Zions Bank chief economic adviser Randy Shumway.
The Zions Bank Present Situation Index — an assessment of confidence in current business and employment conditions — declined 6.6 points to 88.7, while the Zions Bank Expectations Index — an estimate of consumer confidence in the economy six months from now — increased 4.6 points from December to January and now sits at 101.2.
When the Expectations Index moves substantially higher than the Present Situation Index, consumers are planning to spend more in the coming months and likewise expect the economy to improve, Shumway explained. The 12.4-point difference between the two indices is the largest difference since June 2013, he added.
"In the coming months, consumers in Utah expect to see improvement in the labor market and with regard to personal earnings," Shumway said. "Thirty-four percent of Utahns expect more jobs to be available six months from now — up nearly 10 percentage points month-over-month — and 31 percent expect their household income to be higher six months from now than it currently is — up from 26 percent in December."
In addition, more Utahns are expecting improvement in their 401(k) plans, with 38 percent reporting they believe $1,000 invested in their retirement account is likely to be worth more in one year, compared with 35 percent last month.
Meanwhile, Shumway noted that gasoline prices have started to creep higher over the past few weeks, and this likely prevented the Consumer Attitude Index from moving higher this month as gasoline prices and consumer attitudes tend to be inversely related.
The percentage of Utahns expecting gasoline prices to move higher over the next year remained above 70 percent in January, and the percentage of Utahns expecting gasoline prices to drop decreased from 8 percent in December to 6 percent in January, he said.
"Those who expect gasoline prices to move higher believe prices will rise about 44 cents per gallon," he said.
The Consumer Attitude Index is based on a representative sample of 500 Utah households. The monthly survey is conducted by The Cicero Group and has a confidence interval of plus or minus 4.4 percent at a 95 percent confidence level. The Utah Consumer Attitude Index data is compared with both local and U.S. data from previous months to identify key consumer sentiment trends in the state.