By all accounts, the U.S. economic recession has been in remission for seven years, but most consumers didn't realize it until recently when key economic indicators began to drive the point home, according to Bill Hampel, chief policy officer for CUNA.
“Now that the jobs market has kicked in we have reached escape velocity and are poised for a full economic recovery,” Hampel told attendees in “The Status of the Economy,” one of eight GAC breakout sessions Tuesday afternoon. “The U.S. is now a major economic engine for growth among the world's economies.”
Hampel shared the stage with Mike Schenk, CUNA's VP of economics and statistics. Hampel discussed the economic recovery as a whole while Schenk evaluated credit union response to economic trends.
Different fiscal policy programs launched during both the Bush and Obama administrations provided the foundations for economic recovery, while an aggressive Federal Reserve monetary policy fostered further growth, including a projected rise in interest rates that could happen as early as June or as late as September depending on circumstances, Hampel said.
“We think the economy can withstand a growth in interest rates,” he added. “Not a lot, but some.”
Hampel projected a 3% economic growth over the next few years. Central to that growth will be the continued escalation in household spending thanks to an improved consumer optimism driven by jobs growth. However, that area has more progress to make in order to fully sustain the recovery, Hampel said.
Between 2008 and 2010, American businesses lost 8.7 million jobs, Hampel said. As of May 2014, that deficit was recovered, but that's not accounting for other natural job growth as well wage growth that would have given the jobs picture even more stability. Nonetheless, Hampel said, consumer confidence in the economy is stable and getting stronger.
“We've seen some 'kinda normal' confidence levels in the past few months,” he added.
From a credit union standpoint, 2014 was a very good year and 2015 could be even better, Schenk said.
“It's good news no matter where you look in credit union land,” Schenk said. “NCUA data from February 2015 didn't give us anything in the way of big changes or eye-popping results, just a continuation of the trends we have been reporting.”
Those trends include credit union member growth that is three times the overall population growth, the fastest growth in loans since 2005, strong earnings despite low interest rates and a lackluster savings performance largely due to a stock market “that's going gangbusters,” Schenk said.
Loan growth continues to be the driver, with auto loan growth of 10.4% in 2014 at the wheel. Schenk expects auto loan growth to increase to 11% in 2015, with first mortgages not far behind at an expected 9% growth next year.
“It's true more people are discovering and valuing the credit union difference,” Schenk said. “Numbers are strong and we expect them to stay strong, with a projected membership growth of 3% for 2015.”
Complete your profile to continue reading and get FREE access to CUTimes.com, part of your ALM digital membership.
Your access to unlimited CUTimes.com content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking credit union news and analysis, on-site and via our newsletters and custom alerts
- Weekly Shared Accounts podcast featuring exclusive interviews with industry leaders
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the commercial real estate and financial advisory markets on our other ALM sites, GlobeSt.com and ThinkAdvisor.com
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
