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Show January 2023 Utah Consumer Sentiment February 3, 2023 Utah’s Consumer Sentiment Rises in January Utah’s consumer sentiment increased from 68.7 in December 2022 to 75.6 in January 2023, according to the Kem C. Gardner Institute’s Survey of Utah Consumers. A similar survey by the University of Michigan also found sentiment rose from December (59.7) to January (64.9) among Americans as a whole. The indices for Utah and for the U.S. increased in both December and January, indicating an improving consumer outlook. Subdued inflation, lower fuel prices, and rising incomes are positively impacting Utahns sense of economic well-being. Table 1 shows responses to questions that define “sentiment” for Utah (Gardner Institute survey) and the U.S. as a whole (from the University of Michigan). These questions are combined into an overall index, also shown in Table 1. Questions Comprising the Index Utah’s survey of consumer sentiment includes five questions concerning current and expected future economic conditions. These questions are identical to those included in the University of Michigan’s Survey of Consumer Sentiment. They are the first five questions shown in Table 1. Two of these questions refer to business or economic conditions in the country as a whole (rather than in one’s home state, for example). We supplement these two questions with alternative versions that refer to the state of Utah rather than the country as a whole. Alongside each question is shown its index score—higher scores indicate greater confidence. The index score is calculated as the difference in the percentage of respondents who give a “favorable” reply and the percentage of respondents who given an “unfavorable” reply, plus 100. For example, Utah’s score for the first question is 101. This means the “favorable” replies outnumber the “unfavorable” replies by one percentage points. The nature of “favorable” varies somewhat by questions. Generally, a “favorable” response is one that indicates being better off, or having high hopes for the future (i.e. higher confidence, or sentiment). For the first question in Table 1, for example, the possible responses are “Better Now,” “About the same,” and “Worse Now.” In this case, “Better Now” is “favorable,” while “Worse Now” is “unfavorable.” Neutral responses (e.g. “About the Same”) do not figure into the index. Consumer Sentiment Index: Utah and U.S. Consumer Sentiment 120 100 80 75.6 60 64.9 40 20 0 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan 2020 2021 2022 2023 Utah U.S. Pre-pandemic U.S. sentiment level Source: Kem C. Gardner Policy Institute and University of Michigan Kem C. Gardner Policy Institute I 411 East South Temple Street, Salt Lake City, Utah 84111 I 801-585-5618 I gardner.utah.edu Table 1: Responses to Questions Comprising the Utah Consumer Sentiment Index, 2022 December 2022 Question Favorable Unfavorable January 2023 Index Favorable Unfavorable Index 48% 84 40% 39% 101 27% 22% 104 32% 19% 113 Regarding business conditions in the country/Utah as a whole, do you think that during the next twelve months we’ll have good times financially, or bad times? 19% 68% 51 21% 69% 52 38% 47% 91 43% 44% 99 Looking ahead, which would you say is more likely, that in the country/Utah as a whole we’ll have continuous good times during the next five years or so, or that we will have periods of widespread unemployment or depression? 31% 60% 70 35% 58% 78 50% 43% 108 54% 41% 112 25% 62% 63 28% 57% 71 Would you say that you (or you and your family living there) are better off or worse off financially than you were a year ago? 33% Do you think that a year from now you (or you and your family living there) will be better off financially, or worse off, or just about the same as now? About the big things people buy for their homes, such as furniture, a refrigerator, stove, television, and things like that. Generally speaking, do you think now is a good or bad time for people to buy major household items? Gardner Consumer Sentiment for Utah 68.7 75.6* Michigan Consumer Sentiment for U.S. 59.7 64.9 * Statistically significant increase at .05% level Note: Percentages shown in the table have been rounded. Source: Kem C. Gardner Policy Institute and the University of Michigan Calculating the Index The University of Michigan calculates the Index of Consumer Sentiment as a ratio. The numerator is the sum of the differences between the percent responding favorably and the percent responding unfavorably, plus 500 (so that the numerator is the sum of the index scores shown in Table 1). For example, for the first question shown in Table 1, this difference is plus one percentage point for Utah in January. The denominator is the value the numerator took in a particular historical year, rescaled. For Michigan, this value is 6.7558 and refers to the year 1966. To this ratio, Michigan adds a small amount—2.0—to account for changes to the survey during its early years. We incorporate this reference-period value from the Michigan survey into the Utah indices. Survey Methodology The Utah Consumer Confidence Survey uses key questions from the University of Michigan’s Surveys of Consumers. These questions measure residents’ views of the present economic situation and their expectations for the economy in the future. Data gathered from the key questions are used to create the consumer confidence index for Utah. Demographic questions are included in the questionnaire to allow for additional analysis of the data and to assess the representativeness of the sample. The 409-interview sample yields a +/- 5.0% tolerated error on total data. All survey interviews are conducted by telephone by a professional data collection company. The sample is drawn to be proportional to the population of Utah’s 29 counties. Weighting of demographic data may be used to ensure the sample more closely aligns with Census data for Utah adult residents. I N F O R M E D D E C I S I O N S TM 2 gardner.utah.edu |
