SALT LAKE CITY — With the holiday shopping season officially underway, Utah consumers are bullish on their economic prospects for the coming weeks.
The Zions Bank Utah Consumer Attitude Index remained unchanged to register at 120.5 from October to November — the 30th consecutive month above 110, which indicates optimal economic sentiments from Utah consumers. However, year over year, the index lost 3.9 points.
Nevertheless, according to the index, more than 70 percent of Utahns plan to spend as much or more than they did last year on holiday shopping.
"Nationally, indications are that this (past) weekend was strong with Mastercard estimating a 9 percent increase in total year-over-year Black Friday sales," explained Chad Berbert, principal with Cicero Group. "Much of those sales include significant online sales, which were up over 23 percent in 2018."
Just over half of holiday spending is expected to be done online, compared to 44.5 percent at brick-and-mortar stores, he said. Households in Utah plan to spend an average of nearly $1,100 on holiday shopping this year, he added.
In comparison, the national Consumer Confidence Index declined 2.2 points to register at 135.7 this month.
The Utah Present Situation Index — which examines current economic conditions — rose 2.6 points month-to-month to register at 133.7 while the Utah Expectations Index — a measure of future economic conditions — decreased 1.8 points to register at 111.7 for the period.
Berbert noted that local sentiment on current job availability is nearly as positive as it has ever been, with 63 percent of Utahns surveyed feeling jobs are plentiful. Consumers also feel optimistic about the future with 64 percent believing business conditions are good — the highest level recorded since Zions Bank began tracking the overall index in 2011.
That measured optimism should bolster consumer spending this holiday season, he said.
"When people are confident about jobs, they tend to spend more," he said. "This is a pretty good measure of where Utahns are at."
Berbert said Utahns are also anticipating a tempering of housing prices, with 53 percent feeling housing prices will increase over the next 12 months — the lowest percentage since December 2015.
"Generally, Utahns have seen this year such an increase in housing prices that expectations of an (added) increase are diminishing," Berbert said. "It will remain to be seen what happens next year. We continue to have very strong job growth, strong population growth — both of those things tend to put pressure on the housing market."
The positive outlook from consumers continues to support the state's robust economic fortunes, one analyst said.
“The fact that so many are still confident that housing prices will still increase and that a 401(k) investment will increase in value suggests that Utahns are confident that economic fundamentals are strong and that the economy will continue to grow,” said Randy Shumway, chairman and partner of Cicero Group.
The Zions Bank Consumer Attitude Index is based on a representative sample of 500 Utah households surveyed by Cicero Group using a confidence interval of plus or minus 4.38 percent at a 95 percent confidence level. The results are compared to both overall index data from Utah and U.S. data from previous months to identify key consumer sentiment trends across the state.Comment on this story
Meanwhile, David Deull, principal economist with U.K.-based data analysis firm IHS Markit, stated Americans’ views on the job market strengthened further in November and the Consumer Confidence Index report bodes well for consumer spending this holiday season.
"The tight labor market continues to drive consumers’ strongly positive views on the present situation," he said. "The unemployment rate is the lowest in decades, jobs are easier to find, job security is higher and real disposable income growth is spreading to lower-income households."