CUNA’s latest Economic Update for July features CUNA Vice President, Diversity, Equity and Inclusion Samira Salem examining how the latest impacts of the COVID-19 pandemic will affect consumers through the end of next year.
“The economic recovery started as states opened up in late May and early June, but the latest surge of COVID-19 leading to around 70.0% of those states reversing re-opening,” she said. “This is certainly slowing economic activity and increasing the likelihood of a protracted recession.”
Salem said she expects economic growth to remain muted in the fall and winter months as “we adjust to this new normal of mask wearing, and social distancing and get more testing and tracing in place.
Overall CUNA economists project a 5.3% fall in relative GDP in 2020, followed by a growth of 4.0% in 2021 and a decreasing trend in U.S. unemployment, from around 10.0% end of 2020 to 8.0% end of 2021. To put this into perspective, the highest unemployment rate during the Great Recession registered 10.0%.
Salem noted unemployment is highest in Black and Latinx populations, which are more likely to work in low-wage jobs taking the biggest hit during pandemic.
“The brunt of the burden is falling on those least able to bear it,” she said, adding that women are also disproportionally impacted due to things like childcare concerns. “Recovering from job loss tends to take longer for these groups they spend more time looking for jobs and generally find jobs that pay less than the ones they’ve left.”
In mid-July the 30-year mortgage rate hit 2.98%, the lowest recorded rate.
“The housing market seems to be coming along, this is obviously helped by historically low interest rates,” Salem said. “Despite the fact there’s tight inventory and relatively high home prices, but the lower mortgage rates have particularly helped boost mortgages and refinances.”
The complete video can be found below: