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Economic Recovery Continues to Struggle, Turner Says
Tuesday, December 10, 2013 7:00 AM

According to Brian Turner, director and Chief Strategist with Catalyst Strategic Solutions, the employment report reflects an economic recovery that continues to struggle. Although the nation’s unemployment rate has reportedly declined from 7.3 percent to 7 percent, the number of unemployed stands at 10.9 million, with approximately 4.1 million people (37 percent of the unemployed) considered long-term unemployed after having been out of work for more than 27 weeks.

“While the drop in the unemployment rate gives the appearance that the sector is improving, the pace of growth continues to be very slow, as represented by the weak 1.4 percent increase in consumer spending,” notes Turner.

An encouraging sign is the jump in vehicle sales at the end of the third quarter. The latest report from the Federal Reserve suggests consumer credit at credit unions benefited from the increase in sales. According to their September report, non-revolving credit increased $7.8 billion at credit unions during the third quarter and the industry’s market share held at 9.9 percent, suggesting strong participation by the industry.

“With future mortgage originations expected to decline over the next year, the growth in consumer loans follows the path that credit unions must take to experience overall loan growth in 2014,” adds Turner.

The Mortgage Bankers Association projects total mortgage originations to decline 33 percent next year with the share of refinancing applications falling below 40 percent.