The latest America’s Credit Unions Economic Update was shared at the Government Affairs Conference earlier this month.
These monthly updates are important for understanding what is happening in the economy at large, and the credit union industry, as well as what the latest data can mean for your credit union
Grab the highlights below.
A look at the latest credit union data:
- $22 billion in financial benefits for credit union members through lower fees, lower interest on loans, higher interest on savings accounts
- According to the Consumer Pulse Survey
- 90% of credit union members are very sure they can get a low-cost loan at a credit union
- 89% of credit union members say a credit union has positively impacted their financial wellbeing
- Credit union members are 2 times more likely to say their credit union is in touch with and care about the local community
The macro view:
- GDP growth average for 2024 is projected to be lower than last year
- The tightening of the labor market is expected to come yet this year
- The unemployment rate will tick up to 4.3% for the year but remain well below high levels as seen during the pandemic
- Wages increased more than total compensation last year, but the two are coming more in line with each other again this year
- Wages also diverted widely for job switchers versus those who remained – but that gap is closing this year, showing pressure on employment costs is decreasing
- Inflation has dropped from a high of 9% to 3.1% at the end of last year
Consumer Outlook:
- Consumer spending grew 6% last year
- Real personal consumption was 10% higher than pre-pandemic levels mostly dominated by personal service consumption
- This was seen in healthcare, food and accommodation, and recreation
- Rising wages driving consumption growth
- Excess savings built up during the pandemic are nearly exhausted for the bottom 80% of income distribution
- 17% of Americans are financially vulnerable in 2023, an increase of 2% from the year before
Credit Union Outlook:
- Earnings outlook likely to drop to a 14-year low with an ROA of .50
- Share growth expected to be low
- Delinquencies are rising but still well below traditional banks
- Loan growth forecasted to see 4% growth in 2024
Understanding the economic data, and how it impacts your credit union, your products, and your members is important to success in your credit union career. Especially if you are working in credit union products.
If you are new to the credit union industry and need to get up to speed on how financials work and relate to different areas, the Financial Management School, coming up May 13-16, is a good place to start, with two tracks to accommodate your level of experience and expertise.
You can watch the full update on YouTube.