Utahns' confidence seems to be catching
American consumers' confidence in the economy, boosted by a more optimistic outlook for jobs, is finally starting to catch up to how Utahns have been feeling for several months.
Over its 2Â½-year life, Zions Bank's Consumer Attitude Index has routinely showed Utahns feel more hopeful than their U.S. counterparts, even when local economic conditions were much worse than today. But this month, with the nation's economy clearly gaining strength, the gap narrowed noticeably, as Utahns digested the meaning of higher lending rates and felt less buoyant about labor conditions closer to home, according to separate reports released Tuesday.
In Utah, the Zions index increased just 0.9 points, to 87.9, for June from 87 in May. Nationally, the Conference Board's consumer confidence index rose to its highest level in more than five years. That index jumped 7.1 points, to 81.4 in June from May's reading of 74.3, which was revised slightly downward from 76.2.
"Utah has consistently been 15 to 20 points higher. That difference is finally shrinking," said Randy Shumway, CEO of The Cicero Group, which compiles the Zions index each month.
There is still a way to go before Utah and U.S. consumers are certain the economy is clearly free of the Great Recession. Consumers' confidence is watched closely because their spending accounts to about 70 percent of U.S. economic activity. Despite the gains this month, both indexes remain below the 90 reading that indicates a healthy economy. Shumway thinks the two indexes would need to hit 110 before he would say conditions were flourishing.
Still, the reports show Americans are becoming more positive about economic conditions and have a more optimistic view of what the economy and labor market will look like in the next six months. If the hopeful thinking holds, that should drive Utah attitudes even higher in the months ahead, Shumway said.
"The rest of the country's increased ... challenges and pessimism have served as a [drag on] Utah's economic expansion. The last two months suggest that U.S. confidence is finally on the rebound, which will only propel Utahns' confidence," he said.
There's plenty of evidence that families along the Wasatch Front are feeling comfortable about spending money on nonessentials, said Chris Steele, owner of the Wairhouse Trampoline Park in Salt Lake City.
Steele opened the family-owned business in November. Since then, people have come to the park in large numbers, happy to shell out serious money to see their children exercise on trampolines for an hour or two. Tuesdays through Thursdays, the admission charge for the first hour is $8 for children 7 and younger and $10 for those 8 and older. A typical party is a mother who brings three or four children. On weekends, when rates are higher, 30 birthday parties are common.
"I don't hear anyone complaining about prices," Steele said. "I don't think [families] throw money around wastefully, but they will spend it."