Even as the nation slogs through the final stages of a turbulent presidential election, the next two years should be good ones for credit unions, one economist said today.

"We're forecasting a modest acceleration in economic growth to 2.4% in 2017 from this year's very slow 1.6%," said Steve Rick, CUNA Mutual Group's chief economist, during CUNA Mutual's annual online Discovery Conference. "An inventory correction, reduced energy sector investment due to falling oil prices, and the negative impact of the rising dollar on our exports all contributed to the U.S. economy's slower growth rate. These factors will start to fade in 2017, resulting in a growth rate slightly above the target 2% mark."

Among the good news for CUs, said Rick, is that housing construction will likely accelerate due to a shortage of available homes for sale, average hourly earnings are expected to increase by 3% next year, and low oil prices will begin to rise. All of that – along with sustained low interest rates – should lead to increased spending, and rising economic confidence will boost savings and lending growth at CUs. He forecasted rates rising by a quarter of a point before the end of 2016 and three more times next year, resulting in a hike of about 1% for both short- and long-term rates.

"This will give credit unions originating adjustable-rate products a boost in yield on assets," he said.

With unemployment currently sitting at just 4.7%, noted Rick, the economy will also likely reach full employment next year, which should be a boon to CUs' auto lending portfolios.

"We're seeing more Americans buying cars, so we expect to see another record year of vehicle sales in 2017 – with 17.75 million vehicles sold – due to pent-up demand," he said. Rick also forecasted an increase in home sales to 5.5 million next year – along with a 5% increase in home prices – which will benefit CU mortgage lending.

With credit union membership growth expected to hit 3.8% this year, Rick suggested that next year could see "a little bit of a slowdown to 3.3%, but still very strong."

"Bottom line, the U.S. economy will not experience signs of a recession until the end of 2018," said Rick. "The economy is growing, wages are rising, unemployment is down and savings growth is strong due to low energy prices. These are all indications the economy will remain strong throughout 2017 and into 2018."

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