Spotlight

Latest Findings

Household Spending and Income Expectations
Household Income and Spending

Growth expectations show signs of a slowdown in August 2021, after a period of exceptionally high growth throughout spring and summer. Households expect to spend 2% more in the next three months than this time in 2019, but this is down from 6% in June 2021. The slower spending growth suggests some concern and increased uncertainty about economic growth in the future.

Business Growth Expectations
Business Cycles over Time

August 2021 showed a significant slowdown in the ongoing economic boom in Utah, compared to July 2021. This decrease is likely due to increased uncertainty around the Delta variant of COVID-19 and related uncertainty in consumer demand.

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

After a period of exceptionally high growth in spring and summer 2021, growth expectations show signs of a slowdown in August 2021. Households expect to spend 2% more in the next three months than this time in 2019, but this is down from 6% in June 2021. The slower spending growth suggests some concern and increased uncertainty about economic growth in the future. Slower spending is concentrated in e-commerce, electronics, and food at home—three categories that have experienced higher than average expected spending over the last six months. Consumers have experienced higher prices for food, utilities, and entertainment in August relative to June, with housing prices remaining high. For this month, we provide a spotlight on the expected employee-initiated job changes (e.g. “Quits”), highlighting general job satisfaction. A surprisingly large 1 in 5 Utah consumers think it is somewhat likely that they quit their current job within the next three months. Of those that consider quitting feasible, 20% say their current pay is too low and over 10% indicate other options provide better remote work, better pay, better benefits, and better flexibility. Finally, respondents say the risk of catching COVID-19 dramatically increased since June, potentially providing an explanation for slowing spending and increased uncertainty.

Budget expectations

In the following figures, we report spending, income, and savings expectations for the next three months relative to this time in 2019 (pre-pandemic). Expected spending (shown below) is much lower in August compared to June, which could result in a pull back in the economic growth Utah has been experiencing over the spring and summer.

Household Spending

Relative to April, income expectations (shown below) are lower for everyone, except the respondents themselves—which remain stable.

Household Income

Savings (shown below) are expected to decrease for the average American and Utahn, but are expected stay steady or slightly increase for households themselves.

Household Savings
Expenditure details

We asked households how much they spent in 2019 in different spending categories and their expected spending in these categories for 2021. We report expected spending in 2021 (relative to spending in 2019) for some of these categories in the below figures. The blue line at 100 indicates the same amount of spending as in 2019, and a value of 110 would indicate 10% more spending than in 2019.

Expected Consumption Growth

The above figure shows consumption decreases in transport out-of-state, accommodation out-of-state, entertainment, and special events—all items that have been responsive to COVID-19 cases in the past and likely being damped by the recent surge in cases.

Expected Stable

The above figure shows spending categories of e-commerce, electronics, and food home experienced decreases in expected spending in August relative to June. This is important, since these categories all exhibited higher spending levels during the pandemic.

Quitting Jobs

We asked households how likely it was that they would quit their job in the next three months. We grouped their answers into not likely (less than 5% chance), somewhat likely (5%-50%) and likely (50% or more). While most respondents do not find it likely they will quit, a large minority of 28% said a quit is at least somewhat likely. For respondents who stated that they are “likely” to quit their current employer, the top reason included “pay too low,” and “better opportunities elsewhere” in terms of stability, flexibility, benefits, remote work, as reported in the figure below. The elevated rates of employee initiated job changes likely will continue to put upward pressure on wages.

Expected Reasons for Quitting

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

August 2021 showed a significant slowdown in the ongoing economic boom in Utah, compared to July 2021. This decrease is likely due to increased uncertainty around the Delta variant of COVID-19 and related uncertainty in consumer demand. Inflation risk decreased from July—fewer businesses said they raised prices in August and average price changes declined. One exception to this broad pattern is the construction industry, for which inflation increased. Our August 2021 spotlight analyzes potential “skill gaps” in the labor force. Businesses report candidates have about 80% of the basic and social skills they are looking for. These skill gaps have implications for job creation and wages: if businesses could find employees with these skills they would almost double the pace of hiring and pay these employees roughly 15% more. We also provide a spotlight on the ongoing changes in work from home, finding a potential increase in productivity due to work from home and a fluid work situation as businesses respond to new COVID-19 cases.

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 August, though moving closer to ’stationary‘ (the center of the figure) relative to the past three months. 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. This figure shows, however, that revenues are only 2-3% higher than 2019 levels, down from roughly 8% in July. Similarly, expected revenues are 2-3% higher than 2019 levels, down from roughly 8% in July. (Note: to minimize the effect of outliers, this figure presents median values.)

Latest Business

The second figure shows continued economic growth across industries. Finance is booming with revenues 10% higher now relative to 2019 and expected revenue growth above 10%. In August, fewer industries are above the 45 degree line (dashed black line) than in July, suggesting that fewer industries expect stronger revenue growth over the next three months than their current revenues.

Hiring
Latest Business

Businesses are expecting to create more jobs in the next three months, and this job growth is higher than in July, as seen in this figure. Despite concerns over demand and uncertainty of revenues due to COVID, the labor market looks to remain tight as businesses continue to look for employees.

Pricing and inflation
Latest Business

Businesses report waning inflation concerns in August. 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. This figure shows both the number of businesses that reported price changes, as well as the median reported price change (in percent). We find that roughly 15% of firms report changing a price last month, which is down from July. Businesses report raising prices by an average of 7% in August, down slightly from roughly 10% in July.

Skills

Employers are still seeking qualified candidates. In August, we asked businesses about a series of basic and social skills that they are looking for and whether they are finding employees with these skills. The basic skills we asked businesses about include:

  • speaking (talking to others to convey information effectively)
  • reading comprehension (understanding written sentences and paragraphs)
  • basic math (using math to complete work tasks)
  • active listening (giving full attention to what other people are saying, taking time to understand points being made)
  • active learning (understanding the implications of new information for both current and future problems)
  • critical thinking (using logic and reasoning to identify the strengths and weaknesses of alternative solution)
  • learning strategies (selecting and using training methods when learning new things)
  • monitoring (assessing performance of yourself and other individuals and taking corrective action)
  • ability to provide a negative recreational drug test.

Basic Skills

The social skills include:

  • coordination (adjusting actions in relation to others' action)
  • instructing (teaching others how to do something)
  • negotiation (bringing others together and trying to reconcile differences)
  • persuasion (persuading others to change their minds or behavior)
  • service orientation (actively looking for ways to help people)
  • social perceptiveness (being aware of others’ reactions and why they react as they do)

Social Skills

Businesses respond that job candidates have about 80% of the basic skills they are looking for, with a few exceptions. They report no problems finding candidates with a negative drug test. They also find candidates with slightly better reading comprehension and speaking. Businesses also report job candidates have about 80% the social skills they are looking for.

This “skill gap” between employer needs and employee abilities has implications for job-creation and wages. Businesses report they would be willing to hire 10% more employees, relative to their current workforce, if they found candidates that had 100% of the skills they are looking for. Compared to the 12% expected hiring increased reported in the figure above, this means that the pace of hiring would almost double if employers could find suitably qualified candidates! They also report that they would be willing to pay over 15% more for candidates with all of the basic skills they are looking for and 13% more for candidates with all of social skills they are looking for, as reported in the figure below.

Social Skills
Work From Home

Businesses shifted largely to work-from-home arrangements as COVID-19 risks increased. We asked businesses what percentage of their workforce is working from home and how productivity has changed because of work-from-home arrangements. We report these in the figure below. In December 2020, businesses reported that 60% of their workforce was working from home. This percentage dropped in January and again in June to roughly 30%. In August, the percentage increased slightly to roughly 35%. This increase likely is in response to increasing case counts and added uncertainty for the fall. In December 2020, businesses reported no change in productivity due to work-from-home arrangements. Productivity began to increase, peaking around 5% in June.

Work From Home

Past Reports

Have you been contacted by us?

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.

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.