Utah consumer sentiment falls, state economy ‘increasingly subdued’ amid international unrest

SALT LAKE CITY — After a few months of treading water, economic fallout tied to the war in Iran is starting to set in across the Beehive State, according to data from the Utah Chamber and the University of Utah Kem C. Gardner Policy Institute.

Inflation rose from 3.8% in April to 4.2% in May, year over year. This marks the highest level in three years.

Related: Soaring gas prices lead to biggest monthly inflation spike in four years

While Utahns have generally viewed the economy through a rosier lens than the rest of the country, rising oil and gas prices have led to higher energy costs and heftier payments at the pump.

While consumer sentiment fell by only 0.2% in Utah in May, it followed a drastic 13.5% drop from March to April — the most significant month-to-month decline since 2020, according to the Gardner Institute.

May also saw the U.S. consumer sentiment drop 10%, reaching an all-time low.

“Inflation reached a three-year high in May, and Utahns are feeling that pressure,” Derek Miller, president and CEO of the Utah Chamber, said in a statement.

It’s worth noting, though, that preliminary June results from the University of Michigan’s national consumer sentiment survey show sentiment ticking up about four index points. This can likely be attributed to consumers experiencing some relief as gas prices ease.

The national average price of a gallon of regular gas is $3.92, down significantly from May’s average of $4.51, according to AAA data.

In Utah, gas remains more expensive than the national average, averaging $3.99 per gallon of regular gas statewide. Prices are higher in rural parts of the state, with Daggett County having the highest average price at $4.96 per gallon, followed by Piute ($4.63) and Rich ($4.46) counties.

Still, Miller said Utah’s modest drop in sentiment in May is an indicator that the state’s economy is “holding its strength under real national pressure.”

That’s likely due to Utah outperforming other states, notably in terms of unemployment.

April data from the U.S. Bureau of Labor Statistics puts Utah at a 3.8% unemployment rate, lower than the national average of 4.3% and significantly lower than Utah’s western neighbors of Washington, Oregon, California and Nevada, all of which have unemployment rates exceeding 5%.

Despite some positive indicators, Utahns are far from free of the economic pressures felt across the country.

“Utah’s economic outlook remains increasingly subdued, hindered by persistent sluggish job growth and lower consumer confidence amid international unrest,” Natalie Gochnour, Policy Institute director, said in a statement. “Mounting energy costs have driven inflation to its highest level in several years, exacerbating financial strains for Utahns. While our state continues to outperform other parts of the country, ongoing challenges mirror a broader national trend of economic deceleration.”