Economy expands at ‘record-breaking’ pace: Credit Union Trends Report

In its October 2020 Credit Union Trends Report, based on data from August, the sixth full month of the COVID-19 pandemic, CUNA Mutual Group reported that the U.S. economy expanded at a record-breaking 33% annualized pace in the third quarter, but economic output is still down 2.9% when compared to the third quarter of 2019.

Credit union loan balances rose 0.2% in August, below the 0.9% pace set in August 2019, and during the past 12 months, credit union loan balances increased 6.6%, slightly faster than the 6.4% pace set in the year ending August 2019, according to the report.

The credit union share of the first mortgage originations market rose to 8.7% in the first half of 2020, up from 8.2% during the first half of 2019 and up from 2.6% prior to the 2008-09 financial crisis.

The report also found that:

  • the economy gained 661,000 jobs;
  • the unemployment rate decreased to 7.9%;
  • personal income fell 2.7%;
  • personal spending rose 1%;
  • consumer prices rose 0.4%;
  • consumer confidence fell;
  • new home sales rose 3%;
  • existing home sales rose 2%;
  • auto sales fell 0.7%;
  • home prices rose 1%; and
  • the 10-year Treasury interest rate increased 3 basis point to average 0.65%.

Looking forward, a “double dip” recession may occur this winter if the pandemic spikes, while the latest economic forecasts have the economy expanding at a 5% annualized pace in the fourth quarter, according to the report.

Further, the report indicated that in 2021, credit union loan growth is expected to reach 6% and credit union deposit growth is expected to reach 8% in 2021.

To view the full report, click here.

The Credit Union Trends Report is a monthly “pulse check” on the state of the credit union marketplace, often placed in a historical context. The report includes data from two months prior and is published and distributed by Steven Rick, chief economist for CUNA Mutual Group. The Trends Report is intended to provide a review and analysis of recent credit union financial performance and operational results in the context of recent economic activity. Data and analysis are provided to establish standards against which credit unions’ own performance can be compared.

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