In Monday's Economic Update, CUNA Senior Policy Analyst Samira Salem said she expects this year’s growth rate will be better than most, but not as big as 2018.
“We’re well into the 10th year of economic expansion and are hitting the late stage of the business cycle where we’re starting to see some headwinds predominating,” Salem said. "CUNA economists expect to see the pace of growth slow in 2019, but even then, it will likely continue to be above-trend growth."
The chief “downside risk” Salem mentioned was the trade dispute with China, which she said has already caused increased prices for some manufacturers and weaker sales for farmers hurt by retaliatory tariffs. Other risks are rising interest rates, slowing growth abroad, Brexit, volatility in the stock market, declines in U.S. Treasury yields, and the waning effects of the tax cuts.
On the plus side, Salem said the labor market remains strong with a “whopping” 312,000 non-farm jobs added in December and unemployment rate that ended the year at 3.9 percent.
CUNA also released its estimates for the November 2018 loan portfolio, showing total loans rose 9.4 percent to $1.06 trillion in the 12 months ending Nov. 30, with auto lending continuing to be the leading source of growth. The report showed:
Credit unions held $61.3 billion in credit card debt on Nov. 30, up 8.2 percent from a year earlier. Credit unions’ change from Oct. 31 to Nov. 30 was 1.3 percent, down from a 2 percent gain a year earlier. Credit unions’ share of credit card debt was 6 percent in November 2018, unchanged from October 2018 and up from 5.7 percent in November 2017.
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