NAFCU Economist Says Despite ‘Heightened Risks,’ Outlook is Positive
On the same day the Fed chairman was updating Congress on the state of the economy, a NAFCU economist continued to offer a positive forecast.
"Despite heightened risks to the economy, consumer sentiment and spending are strong," said NAFCU Chief Economist and Vice President of Research Curt Long following the release of data that revealed total consumer credit rose 5% in May (seasonally-adjusted, annualized) and is up 5.2% versus a year ago.
"Consumer credit growth was solid for a second consecutive month in May," said Long in a NAFCU Macro Data Flash report. "In a reversal of longstanding trends, the revolving loan segment led the way in April and again in May, averaging 8% annualized growth over those two month. … Delinquency rates have been rising for auto and credit card loans, but are generally on par with pre-crisis levels."
Decrease in Consumer Credit
Total consumer credit for credit unions decreased 0.3% in May from the previous month, compared to a 1.1% increase for banks and a 0.4% increase for financial companies. From a year prior, total consumer credit at credit unions rose 9%, while banks saw a 5.2% increase and financial companies saw a 0.3% decline.
Credit unions now own 11.7% of the market of the market, up 0.4 percentage points from a year ago. Meanwhile, financial companies' market share fell from 13.9% to 13.1% over that period, and banks' share remained unchanged at 41.5%, Long said.