The following Household Reports are conducted every other month, and comprise a sample of approximately
400 Utah residents from around the State. Participants are sampled based on address, correcting for
nonresponse, to produce a represenative sample of the State of Utah.
Executive summary
Spending and income expectations rose in October. Spending is expected to grow faster than income, and
savings is expected to decrease. Households expect to spend 4% more in the next three months than this
time in 2019. This is up from 2% reported in August and September. The increase in income and spending and
the decrease in savings suggests a reversal of uncertainty about economic growth that households were
indicating in August and September. People experienced higher prices for food, housing, cars, utilities,
and entertainment in October relative to September.
Budget expectations
Since February 2021, our survey has found higher expected spending, which peaked in July of 2021. After a
slowdown in August and September, spending expectations once again increased in October. Figure 1 shows
that people expect to spend 4% more—up from 2% more in September.
Spending is expected to increase most for the average American, then average Utahn, your friends, and
finally you. Compared to September, however, the largest increase in spending expectations is for you.
Income expectations also increased in October from nearly 0% in September to almost 4% in October. Savings
is expected to decline slightly. The strong income and spending expectations suggest an economic rebound
relative to August and September.
Respondents say they expect their income growth to be the strongest in October, followed by their friends,
an average Utahn, and finally an average American. Though they expect income to increase for an average
American, their expectations are lower in October than they were in September.
Savings is expected to decrease for you, your friends, an average Utahn, and an average American. Expected
decreases in savings are larger in October compared with September. This may indicate less uncertainty
from COVID-19.
Relative to April, income expectations (shown below) are lower for everyone, except the
respondents themselves—which remain stable.Savings
Prices
We asked households about their expectations of future price changes across various categories
of spending. The figure below shows that households continue to report higher prices, esepecially
for large budget items such as housing, cars, as well as food, and price increases were higher
for all categories in October relative to September.
The business survey is a panel of a 1,000 firms sampled to be representative of the businesses in Utah based
on size, geography, and industry. This leads to the median firm being relatively small and includes
many self-employed people. The survey is administered monthly.
Executive Summary
October saw businesses continue to boom—as current revenues and expected revenues over the next
three months exceeded October 2019 levels. Current revenues and expected revenues were
similar from September. The percent of businesses changing their prices continued to fall. The average
price change, however, saw a sharp increase in October relative to September.
Current Business Climate
We quantify the general business climate by asking respondents to compare their current revenue and their
revenue expectations over the next three months to their revenues in the same month in 2019, to account
for the change since pre-pandemic “normal.” This relative revenue comparison is also useful
since reported values will take seasonality into account: for example, the holiday shopping season in
December. Current and expected revenues define four business cycle regions; boom, downturn, recession, and
recovery.
Specifically, when businesses have current and expected revenues above those of the same month in 2019, we
designate them as in a boom. Similarly, when businesses have current and expected revenues below those of
the same month in 2019, we designate them as in recession. In contrast, firms are classified as being in a
downturn if current revenues are higher than 2019 levels, but expected revenues over the next 3 months are
lower than 2019 levels. Similarly, firms reporting that their current revenues are below 2019 levels but
are expecting revenues in the next 3 months to be above 2019 levels are classified as being in recovery
territory.
The first Figure shows that Utah remains in the boom territory in October with current revenues
and future revenues staying steady from September, but slowing significantly related to early summer 2021.
Current revenues remain higher than this time in 2019 and expectations are for revenues to remain above
their 2019 levels over the next three months. Figure 1 shows that revenues are only 5% higher than 2019
levels. Similarly, expected revenues are 5% higher than 2019 levels.
(Note: to minimize the effect of outliers, this figure presents median values.)
The second figure shows strong economic growth across industries, which all are in or close to boom
territory. The last remaining industries in “recovery” in September 2021 were
“Mining and Oil and Gas”, and “Entertainment and Recreation”. Both of these
industries have moved into boom in October 2021, for the first time since the beginning of the pandemic.
We also note that the dispersion of growth across industries has somewhat narrowed, thereby suggesting
that economic growth across industries is currently relatively even.
Hiring
Businesses are expecting to increase their workforce in the next three months, as seen in the Figure
above. Industries with the strongest hiring plans are “Arts”,
“Information Technology.” “Real Estate” and
“Transportation and Warehousing” saw big declines in hiring in October after strong hiring
in September.
Pricing and inflation
The number of businesses changing their prices has decreased steadily from March. The average percent
change in price, however, rose sharply in October.
To track the risk of inflation for the Utah economy, we ask businesses whether they changed their average
prices last month and, if so, by how much. In this setting, it is useful to keep in mind that most
businesses change their prices infrequently and, therefore, also tend to set their prices even higher if
they expect high future growth and/or inflation. The Figure above reports both the number of businesses
that reported price changes, as well as the mean reported price changes (in percent).
We find that roughly 15% of firms report changing a price last month, and this is down from September.
Businesses report raising prices by an average of 10% in October, up sharply from 7% in September.
The figure above provides additional insight into inflation trends across industries.
We document inflation patterns across industries. Media reports about inflation have emphasized the role
of global supply chain issues, and increased demand due to e-commerce. Such issues are most likely to
affect “Manufacturing”, “Transportation and Warehousing” and “Real
Estate” industries, which all heavily rely on internationally sourced good, intermediate good and
commodities, such as timber. Consistent with supply chain issues, we see large price increases in
“Manufacturing” (below 5% in September to about 10% in October), “Transportation and
Warehousing” (from 5% in September to 18% in October) and “Real Estate” (from 5% in
September to 13% in October) and “Construction” (from 5% in September to 6% in October). But
not all price increases are driven by supply chain issues. Among the largest price increases are those
reported in “Finance and Insurance”, which reported a jump in inflation from 3% in September
to 15% in October after several months of low inflation reports. Several service industries, such as
“Arts and Entertainment” as well as “Educational services” reported a slow down in
inflation.
If you have participated in one of our surveys, thank you very much for your participation. Answers from you
directly inform state leaders and Utah about the economy.
If you have any questions about the survey, you can email utcovid19@utah.edu or
nathan.seegert@eccles.utah.edu.
If you have been contacted by us, either by mail or email, please follow the link on these correspondance to
your survey and note your access code.
Thank you for your participation.
