He added, “The industry experienced a relatively unseasonal growth in loans during the first quarter, probably on pent-up demand and pressured-packed marketing campaigns.”

Going forward, Turner said it will also be important to monitor whether the unseasonal growth in the first quarter was from demand destined for later this summer or early fall and whether the growth experienced during the first half of the year is sustainable.

Meanwhile, consumer prices increased 0.2% in July with across-the-board gains including with gasoline, housing, clothing and food, Turner noted.

“Excluding the volatile, commodity-driven food and energy sector, core inflation also rose 0.2%,” Turner wrote.

The overall increase was less than what was experienced in June but unchanged regarding core prices, Turner said. In July, gasoline prices rose 1%, down from June's 6% gain, and food prices increased 0.1%, cutting in half June's increase.

For credit unions, changes in consumer prices have a two-pronged impact on member behavior and the state of the economy, Turner explained.

“First, obviously as prices increase, it has the capacity to dilute the member's household disposable income,” he said. “This can do one of two things – reduce their level of discretionary spending or turn to short-term credit resources to fund cash flow deficiencies in their budget.”

The latter has the propensity to enhance loan demand temporarily while the former moderates growth, Turner pointed out. Yet a certain level of inflation is needed for the economy to grow. Therefore, the ability to balance these is important, he added.