Credit Union Trends Report: Probability of ‘double-dip’ recession increasing this winter

In its November 2020 Credit Union Trends Report, based on data from September, the seventh full month of the COVID-19 pandemic, CUNA Mutual Group reported that third quarter economic growth came in at 33% and decreased 3% from the third quarter of 2019.

During September, credit unions picked up 209,000 new memberships and loan balances grew at a 4.4% annualized pace, while savings balances rose at a 29% annualized pace. Firms hired 672,000 workers, nominal consumer spending increased 1.4% and long-term interest rates increased 3 basis points.

The report also found that:

  • the economy gained 672,000 jobs;
  • the unemployment rate decreased to 7.9%;
  • personal income rose 0.9%
  • personal spending rose 1.4%;
  • consumer prices rose 0.2%;
  • consumer confidence rose;
  • new home sales fell 3.5%;
  • existing home sales rose 9.4%;
  • auto sales rose 11%;
  • home prices rose 1.1%; and
  • the 10-year Treasury interest rate increased 3 basis point to average 0.68%.

The report’s economic forecast has the economy expanding at a 4% annualized pace in the fourth quarter (1% nonannualized pace) and 3% during 2021. Economic output remains 3% below its previous peak attained in the fourth quarter of 2019 and 5% below potential output.

The report notes that the probability of a double-dip recession this winter is rising as the number of daily new COVID-19 cases rises. Government mandated shutdowns of non-essential businesses and stay-at-home orders could result in job losses in the first quarter of 2021, according to the report.

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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