CUNA economist gives ‘rosiest’ forecast in seven years

Improving labor market, lack of inflation continue to buoy economy.

by. Bill Merrick

The U.S. economy should grow at a 3.5% pace during the second half of 2014, and 3.75% in 2015, says Mike Schenk, CUNA’s interim chief economist.

“That’s one of the rosiest outlooks that we’ve put together in more than seven years,” he said during CUNA’s Pressing Economic Issues Series (PEIS) in August.

Also buoying the economy are a lack of inflation pressure and a dramatically improving labor market. “We expect the unemployment rate to drop very close to 5% at the end of next year,” Schenk says.

This good news has implications for credit unions, he adds, which should translate into increased loan volume.

“There’s a tremendous amount of pent-up demand in the system,” Schenk says. “As the economy improves and more people are put to work, wages and salaries will grow at higher rates than they have in the past,” aiding consumer spending and borrowing going forward.

He warns, however, that not all consumers are experiencing financial improvements personally.

CUNA’s current credit union forecast calls for:

continue reading »