Mixed numbers this spring reflect a glimmer of optimism alongside continuing uncertainty.
Consumer experiences and attitudes around the U.S. about COVID-19 were mixed this spring as the pandemic stretched into its second full month.
Some parts of the country focused on reopening their economies in later weeks, while harder-hit metros maintained stronger restrictions. Though unemployment remained high and many still face serious economic hardship, a survey by management consulting firm McKinsey showed signs that discretionary spending is starting to rebound in some areas.
CU Rise Analytics aggregated data from credit union clients serving approximately 1 million members across the U.S. The following transactional spending patterns were observed in April and May.
The mixed bag of the pandemic’s impact was evident in the varied behaviors across new accounts. Uncertainty and hardship have led some to reduce spending, while others are capitalizing on opportunities around low interest rates.
- Newly originated auto loans slowed down during month of April but gained momentum in month of May, with an 11% increase as compared to March. This may be due to competitive financing offers and incentives from auto dealerships.
- After growing 15% in March, new credit card accounts were down in April and May from 2019, -25% and -16% respectively.
- New mortgages were up in both April and May, rising 63% in April over 2019, and 38% in May.
- Personal lines of credit went down in May, a 33% decrease from 2019.
- HELOCs were also down in May, decreasing 28% from 2019.
Between April and May, national unemployment declined a little from 14.7% to 13.3%. But with many sectors of the economy depressed, it was no surprise that member unemployment data spiked across all metrics.
- The number of members receiving unemployment benefits grew six-fold from March to May.
- Total unemployment benefit dollars were 17 times higher in May compared to March.
- The average unemployment benefit per member was three times higher in May than March.
For the numbers on U.S. Treasury payments and deposits along with a set of recommendations for the credit unions, please check the complete article on cumanagement.com.