Latest Findings

Household Spending and Income Expectations
Household Income and Spending

Growth expectations ticked up in October 2021, with both expected spending and income increasing after the slump earlier in the fall. Households expect to spend 5% more in the next three months than this time in 2019, but this is down from the peak in the summer. While income growth is positive, it is expected to be smaller than growth in spending, possibly reflecting concerns of inflation.

Business Growth Expectations
Business Cycles over Time

October 2021 showed a continuation in the ongoing economic boom in Utah, albeit less so than the peak experienced over the summer months. Current revenues ticked up slightly, but potential supply chain and continued inflation concernt may be dampening optimism about future growth.

Household Reports

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.

Household Spending

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.

Household Income

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

Household Savings

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.

Expected Prices by Category

Business Reports

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.

Latest Business

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.)

Latest Business

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.

Latest Business

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
Latest Business

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.

Latest Business

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.

Past Reports

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About us

We are a group of researchers at the University of Utah cooperating with the State of Utah to provide real-time information about the recovery and potential concerns of businesses to the government. For more information about the research team and our work on the economic impact of COVID-19 see this link to the  Marriner S. Eccles Institute.