WASHINGTON—The U.S. economy will experience moderate growth in 2024 while avoiding recessions, America’s Credit Unions’ economists forecast in ACU’s January Economic Update.
According to the trade group’s economists Curt Long and Mike Schenk, liquidity, loan performance cost of funds, and operating expenses will combine to make a “challenging year for earnings.”
“We expect credit unions to face a challenging earnings environment in 2024. Cost of funds is rising rapidly, which is weighing on net interest margins,” the economic forecast reads. “Loan delinquencies are also climbing, particularly the credit card and auto segments. While member demand for loans will likely rise this year, those credit unions with tighter liquidity will not be able to take advantage.”
Headwinds & Tailwinds
Among the headwinds and tailwinds facing the economy in 2024, according to the forecast:
- Moderating inflation
- Slowing job gains
- Lagged effects of tight monetary policy
- Declining interest rates
- Dwindling excess savings among households
- Pent-up loan demand
- The resumption of student loan payments
The forecast notes these factors make the outlook “far from certain.”
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