Utah’s Economy: A Disconnect Between Indicators and Consumer Experience
SALT LAKE CITY — Economic indicators like consumer sentiment and inflation can sometimes seem like a riddle, telling us one thing but looking and feeling different in day-to-day life, and based on individual circumstances. Utah economists on Wednesday addressed this feeling during a panel discussion hosted by the Kem C. Gardner Policy Institute on how consumers are really faring in today’s economy.
The Consumer Disconnect
Phil Dean, chief economist and research director at the Kem C. Gardner Policy Institute, called the topic timely. “In recent years, Utah’s economy has performed well, but at the same time, there are challenges that many out there experience, as affordability weighs on people’s minds and pocketbooks,” Dean said.
Consumer sentiment in Utah and the U.S. Modestly increased in January, but a disconnect remains among consumers. Zion’s Bank chief economist Robert Spendlove described this using a “K-shaped economy” framework.
“Looking at consumer sentiment by income… upper income over $100,000, they’re feeling OK. Middle income is starting to secure squeezed. And we’re really seeing that pressure in the lower income — under $50,000 — is really struggling,” Spendlove said.
Inflation’s Impact on Daily Life
Inflation is also a complex indicator. Even as national data showed inflation decreasing from 2.7% in December to 2.4% in January, this doesn’t necessarily reflect the experience of consumers at the grocery store or gas pump.
Spendlove explained that consumers focus on the cumulative impact of price increases rather than monthly changes. For groceries, prices have risen 26% over the last five years, according to Spendlove.
The Housing Affordability Crisis
Housing costs represent a significant portion of affordability challenges, particularly in Utah. Dejan Eskic, senior research fellow at the institute, indicated that housing affordability in Utah hasn’t been seen since the turn of the century.
“Ever since then, we’ve been slowly trending up. We had the great financial crisis happen. But then, since 2010, 2011, we’ve been on a drastic upward streak. And by 2022, our (average) house price was six times our (average) household income,” Eskic said. “In just a matter of two decades, our prices have outpaced our income.”
This trend is reflected in Utah’s homeownership rate, which was 68.3% in 2024, the lowest it has been since 1986, when it was 68%, according to data from the U.S. Census Bureau.
Healthcare Costs and Affordability
Healthcare costs are another crucial aspect of affordability. In 2024, 60% of Utah’s population was enrolled in employer-based health care coverage. Approximately 1 in 10 residents are enrolled in Medicare, another 1 in 10 are covered by Medicaid, and just over 8% are uninsured, which is near the national average, explained Melanie Beagley, senior health research analyst at the institute.
Utah relies significantly on the health insurance marketplace compared to the U.S. Average. Healthcare costs, including premiums and deductibles, have shown consistent moderate growth in the employer market.
Over 18% of Utah households spend 10% or more of their income on healthcare costs annually, ranking 12th highest in the nation and 3% higher than the national average.