Utahns' confidence in prospects jumps to record level
The confidence of Utahns about their economic prospects shot to the highest level in Octobersince Zions Bank began tracking consumer confidence 19 months ago.
The bank's Consumer Attitude Index sits at 87.1 2.1 points higher than September and just shy of a reading of 90, which indicates a healthy economy.
The latest index seems to be based on a "convergence of positive economic behavior that is propelling individual optimism" across the state, Randy Shumway, CEO of The Cicero Group/Dan Jones and Associates, which compiles the Zions index, said Tuesday.
In Utah, home prices have been accelerating every month since January. At 5.4 percent, the unemployment rate is the sixth-lowest in the nation,. At the same time, employers are adding jobs at a rate twice as rapid as the U.S. average. Personal income, a key driver of consumer spending, is up 4.3 percent since last year a full percentage point above the rest of the country, Shumway said.
Add in a state budget surplus, the recent purchases of prominent Utah companies Ancestry.com and Vivint, and the oil and gas boom in eastern Utah, and the picture looks even rosier to Shumway.
"There's good news everywhere in the state," he said.
Much of consumers' optimism centers on future prospects for the economy. Sentiment about current business and job conditions fell by 3.5 points, to 65.8. On the other hand, confidence in the economy six months from now rose by 5.8 points, to 101.4, Zions said.
Shumway said the divergence between the sentiments are in line with the growing sense that the economy is healing.
"Typically, when you see future expectations significantly higher than the present situation, that connotes an economic recovery," Shumway said. "When they are parallel to one another, it means stable economic activity, and when the present is higher than the future, it means, 'Uh-oh,' " he said.
Optimism is even showing up in the haunted house business, said James Bernard, who owns Castle of Chaos houses in Salt Lake City, Riverton and Orem. Although overall sales of tickets, at $20 a person, are down because he moved one house to a different location, sales of "add-ons" which entitle customers to extra helpings of horrific experiences from some of the company's 700 volunteer actors are up 45 percent from last Halloween season.
"When the economy is doing better, when confidence is high, people spend more," Bernard said. "I think that the fact that we are selling more of those [add-ons] this year means the economy is better and people have more cash on hand."
The Zions index is usually released on the same day that the Conference Board reports its index of U.S. consumer confidence. However, because of Hurricane Sandy, the national index won't be released until Thursday.
Shumway was heartened that the September Zions index a strong reading of 85 didn't slip backward this month. Because of that, he expects the coming holiday shopping season to be strong.
"There is still bad news out there. But all of this good news [in Utah] is converging to overwhelm the negative news" out of China, Europe, the Middle East, Congress and the presidential campaign "that people are encountering," he said.