Q1 Profile Report: Signs of improvement, but too soon to put pandemic in rearview mirror

The New York Credit Union Association, in conjunction with CUNA, has released the First Quarter 2021 New York Credit Union Profile report. The report provides relevant and up-to-date analysis of key statistics and trends that impact credit union performance.

The report states that it “is obvious” that the economy is moving back to normal. Consumer spending, which represents the major portion of U.S. economic activity, is rebounding and boosting the recovery.

“However, we are watching two trends,” the report states. “Although there is tremendous progress in curtailing the impact of the COVID-19 crisis, emerging new virus variants and vaccine hesitation by some people indicate the fight is not over yet. Unfortunately, it’s too early to say if the pandemic is in the proverbial rearview mirror.”

The other concerning trend is inflation, the report states. “There are glaring and widely reported signs of increases in the general level of prices for goods and services and we expect continued pressure over the near term.”

Other highlights from the report include:

  • Gross Domestic Product, which measures the value of all goods and services produced in the U.S., grew at 6.4% in the first quarter.
  • The U.S. unemployment rate decreased to 6% at quarter-end compared to 6.7% at year-end 2020. In contrast, New York unemployment fell by only three-tenths of a point in the quarter, finishing the period at 8.4%, well above the national norm.
  • The Federal Reserve federal funds effective rate ended the first quarter at 0.07% showing a decline of two basis points over the three-month period.
  • The S&P 500 gained significantly during the first quarter with a 5.8% advance (i.e., over 23% annualized) compared to year-end 2020.
  • Total home sales (new and existing) decreased in the first quarter continuing the declining trend observed during the fourth quarter of 2020.
  • Savings growth for New York credit unions was 6.1% in the first quarter of 2021, exceeding the 3.3% growth during the December 2020 quarter.
  • Commercial loans grew at 3.3% in the quarter (annualized 13.2%) topping the list. Used automobile loans followed with a quarterly growth of 1.3% (5.2% annualized).
  • U.S. credit union memberships increased 1.2% (4.8% annualized) in the first quarter of 2021.
  • Credit union earnings improved significantly in the first quarter, with ROA jumping 21 basis points (annualized) relative to the fourth quarter of 2020.

The report (log-in required) was emailed to the main contacts at Association member credit unions this week. For assistance with accessing the reports, contact the Association’s member relations team at member.relations@nycua.org or (800) 342-9835 ext. 8546.

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