Credit unions can expect U.S. economic growth to remain above historical averages through the end of 2019. That's according to our chief economist Steven Rick, who addressed credit union leaders and staff at our ninth annual Discovery Conference today. While the economy’s growth will likely retreat from its 3 percent pace in 2018, to 2.3 percent in 2019, the current economic expansion will become the longest in American history if it lasts through the end of 2019, he added.
“We continue to enjoy one of the most prosperous stretches of economic expansion in our country’s history, and this positive economic climate has greatly benefitted credit unions,” said Rick. “Today, there are more job openings than unemployed people in this country, marking the first time that’s ever happened. Unemployment sits at about 4 percent now, and should fall as low as 3.4 percent in coming years – far below the expected long-term unemployment rate of 4.7 percent.”
“Whenever savings rates drop to 3 or 4 percent, expect a recession the next year,” Rick added. “Given how consumer confidence is at its highest level in 18 years – prior to the dotcom crash – it’s no surprise that people are buying instead of saving. We are now down to 3 percent, so a recession by 2020 seems likely, but we should not be worried about it resembling what we experienced a decade ago in 2008.”
Rick states that when a recession eventually does occur, that dampened confidence will spur Americans to save more, and that when more people are saving, credit union deposits will increase greatly. As a result, forecasts call for a 9 percent increase in credit union deposits in 2020.
To learn more, read the full press release or watch Rick’s Discovery Conference breakout session, “The Economy and Its Impact on Your 2019 Strategic Plan,” on-demand.
