Guest Commentary: Harnessing the Benefits of Economic Growth

Glen OlpenBy Glen Olpin, Senior Vice President and Chief Economist

The nation’s ongoing fiscal recovery has become the longest-running period of American economic growth on record. January was the 127th month of expansion since the Great Recession concluded, far surpassing the previous mark. However, it is also notable that the pace of improvement is the slowest in history.

Consumers are leading the way, as our collective confidence is at an all-time high; many are comfortable with increasing their spending and debt levels. Personal income is up from last year, while inflation risk and U.S. unemployment remain low. Utah and Idaho enjoy robust employment, while the jobless rates in Nevada and Arizona inched only slightly higher.

Home prices across the country continue on an upward trajectory, but it is not quite as rapid. For the first time in many years, personal incomes are moderately outpacing housing costs. Western states are seeing home prices surge at a rate higher than the national average.

Auto sales slowed only modestly in 2019, with on-and-off downturns projected to extend into 2020. Overall, though, sales are expected to remain robust. Business production and capital expenditures are decreasing, while positive news regarding the resolution of trade disagreements could boost the economy and investment markets.

Overall U.S. economic strength, as measured by real gross domestic product, has been moderating. The yield curve, inverted for a short period during late summer last year, added to worries about future growth. We can expect election-year politics to generate further concerns as well.

What does this mean for America First in 2020?

  • Our credit union is, without question, financially strong and well capitalized
  • Economic slowdowns are uncomfortable, but the durability of our local economies can guard against negative national trends
  • As economic volatility persists, expect higher unemployment
  • Savings should grow, as members improve personal financial balance sheets
  • Competitive consumer borrowing will be available
  • Expect lower rates, especially in the short-term
  • Improved affordability, along with lower mortgage rates, will provide home-buying & refinancing opportunities

On balance, 2019 proved positive for the credit union and our valued members. Although some weakening signals appear in the forecast, we expect to manage any economic fluctuations and continue delivering the benefits you’ve earned.

During my career, I was privileged to witness and personally participate in the tremendous growth and success of America First, founded in 1939 on the principles of service, sharing resources, and members working alongside one another to achieve financial health. Going forward into the next 80 years, we remain committed to these same ideals, providing high-quality, competitive, convenient, safe and professional services to those who choose membership in our credit union.

Editor’s note: Glen retired in January 2020 after 44 years of service to America First Credit Union members.