FILE: Homes under construction in Herriman are pictured on Tuesday, July 5, 2022 (Scott G Winterton, Deseret News)
SALT LAKE CITY — Utah’s unemployment rate is a bright spot on the latest Economic Dashboard provided by the Salt Lake Chamber of Commerce. However other factors, including declining home prices, have the chamber cautioning Utah businesses about a slowing economy.
In September, Utah’s unemployment rate was 2.1%. It was the 19th month in a row that the state’s unemployment rate remained below 3.0%.
The troubling indicators according to the Chamber and the Kem C. Gardner Policy Institute (which together create the economic dashboard) are the decline in home prices and that consumer confidence remains low.
According to the Chamber’s data, Utah’s median home sales price fell from $535,050 in May to $490,000 in September 2022.
The drop is at least partly attributable to several recent interest rate hikes by the Federal Reserve. While the National Association of Realtors notes that home prices traditionally fall toward the end of the year, the fall this year across the nation was three times what was expected.
One bright side, Bankrate analyst Greg McBride told KSL NewsRadio, is that people in the market to buy a home right now have some leeway.
“If you are in the market to buy a home right now, you’ve got a lot more latitude to do your due diligence. You have bargaining power now that you didn’t have six months ago,” McBride said.
The psychological concept of consumer confidence is measured by the opinions and attitudes of consumers. The Salt Lake Chamber reports that, in October, consumer confidence in Utah remained low. The same is true for the nation, the Chamber reported.
And inflation, or rising costs, is to blame for this low level of consumer confidence. The Bureau of Labor Statistics reported in September 2022 that, over the past year the consumer price index for all urban consumers had increased by 8.2%.
Over the past year, while gasoline prices went down by nearly 5%, shelter, food, and medical care all increased.
The Chamber recommends that Utah businesses prepare for a worsening economy.
“While Utah’s position remains better than most states,” said Derek Miller, president and CEO of the Salt Lake Chamber, “it is time for businesses to develop a playbook for a slowing economy.
“Utah has many advantages to rely upon, such as our low unemployment and entrepreneurial spirit, that can help guide us through a potential downturn.”