CUNA News
  • LOG IN
  • Create Account
  • Sign Out
  • My Account
  • LOG IN
  • Create Account
  • Sign Out
  • My Account
  • Topics
    • Community Service
    • Compliance
    • Credit Union Hero
    • Credit Union Rock Star
    • Credit Union System
    • Directors
    • Human Resources
    • Leadership
    • Lending
    • Marketing
    • Operations
    • Policy & Issues
    • Sales & Service
    • Technology
  • Credit Union Magazine
    • Buyers' Guide
    • COVID-19
    • Digital Edition
    • Credit Union Hero
    • Credit Union Rock Star
    • Subscribe
    • Advertise
    • Contact
  • Advertise
  • Awards
    • Nominate Credit Union Hero
    • Nominate Credit Union Rock Star
  • Podcasts
  • Videos
  • Contact

News

Home » Economic Update forecasts ‘swoosh-shaped’ recovery
Policy & Issues

Economic Update forecasts ‘swoosh-shaped’ recovery

September 25, 2020
EconUpdate

CUNA’s latest Economic Update video features Senior Economist Jordan van Rijn examining the latest on the economy, what to expect from the recovery, how long the recovery might take, updated credit union operations forecast and more. The video and presentation are available here.

“The COVID-19 pandemic is unprecedented. It caused an increase in unemployment rate to 14.7%, the highest in decades, and after some adjustment, the BLS actually found the unemployment went up to 20%, the highest since the Great Depression,” van Rijn said. “The good news is that this unemployment rate has fallen considerably since then.”

van Rijn did note that around 250,000 of the new jobs are temporary census workers hired for this year, and that many of the remaining unemployed will likely remain permanent.

CUNA economists estimated unemployment would be at 7.5% end of this year and 6.5% end of 2021

“A lot of people thought we’d more of a V-shaped recovery, go into temporary lock down, get the pandemic under control and then basically open everything up again ang maybe a year later get the jobs back,” van Rijn said. “Now I think we’re looking at a sort of ‘Nike swoosh’ shaped recovery, with a big downturn and then a steady increase over the next couple pf years.

“The bad news is we’re going to be in this for a while with elevated unemployment rates, business closures and people out of work,” he added. “The good news is that if this holds true, it would be faster than the recovery from the Great Recession.”

Credit unions have seen low mortgage delinquencies thus far in 2020, partly due to the fact they’re working with members on payment relief, but van Rijn notes that as these programs begin to expire and months go on, the delinquencies could rise.

Prior to 2020, credit cards were growing at 6-7% per year, but the first 6 months of this year fell 8%, van Rijn said.  Other unsecured loans are up 12% for first 6 months of this year, likely due to credit unions working to provide different loans during the pandemic like emergency loans; Paycheck Protection Program loans also fall into this category.

“New auto loans were on a downward trend before, they’re down 4% this year, while used auto loans up 2.3%, which would be 4.6% annualized growth, stronger than last year,” he said. “First mortgages have grown around 5.9% over the first six months, annualized that would be 12%, the strongest growth in six or seven years.”

First mortgages account for 70% of loan growth this year, which CUNA estimates will be about 6%.

KEYWORDS coronavirus
Credit Union Magazine: Spring 2022

Spring 2022

Credit Union Magazine’s Spring 2022 edition profiles four Credit Union Heroes and examines CUNA's advocacy priorities, the advocacy army, and financial well-being for all.
Digital Edition •  Subscribe

Trending

  • FOM modernization bill passes House Financial Services Committee

  • FOM modernization bill is free-market solution to address financial access

  • Payment services hub explained

Tweets by CUNA_News

Polls

Are you ready for CECL?

View Results
More

Champion for the Credit Union Movement

Credit Union National Association is the most influential financial services trade association and the only national association that advocates on behalf of all of America's credit unions. We work tirelessly to protect your best interests in Washington and all 50 states. We fuel your professional growth at every level and champion the credit union story at every turn.

More CUNA

  • Membership
  • Contact Us
  • Careers

Resources for

  • Credit Union Advocates
  • Leagues
  • Press
  • Providers

Our Affiliates

  • American Association of Credit Union Leagues (AACUL)
  • Credit Union Awareness
  • Credit Union House
  • CUNA Strategic Services
  • National Credit Union Foundation
GET CUNA UPDATES
© 2022 Credit Union National Association | ADA Compliance Notice & Legal
Email Us