PAYING ATTENTION: Normal quarterly spending, saving trends at Georgia credit unions unaffected by government shutdown

PAYING ATTENTION: Normal quarterly spending, saving trends at Georgia credit unions unaffected by government shutdown

The longest government shutdown in U.S. history didn’t stop Georgia credit union members from going about the same saving and borrowing patterns typical of the first few months of a new year.

During the first quarter of a year, consumers tend to focus on recovering from holiday spending by focusing on saving, rather than borrowing. When examining Q1 financial data, therefore, credit unions expect to see a slight weakening of growth in lending coupled with strong savings growth under normal conditions.

That’s exactly what shows in Georgia credit union Q1 data, recently released by Credit Union National Association, the national trade organization for credit unions. According to that data, total savings at credit unions in the state grew by 3.7 percent in Q1 compared to -0.2 percent growth in Q4, 2018, and 2 percent growth in Q3, 2018.

Conversely, total lending at Georgia credit unions grew by 0.2 percent at the end of Q1. That’s relatively weak compared to 0.8 percent growth at the end of Q4, 2018, and 2.6 percent growth at the end of Q3, 2018.

These numbers show normal economic activity by Georgia credit union members during an abnormal political time in the U.S. The longest shutdown the nation has experienced began Dec. 22, 2018 and lasted 34 full days. During that time,some experts worried the economic impact of the shutdown could be detrimental enough to stall U.S. growth. 

But economic analysis from CUNA shows that, like Georgia credit union members, consumers nation-wide didn’t seem negatively affected by the shutdown.

 “The U.S. economy surprised on the upside, growing at a 3.1 percent annualized pace in the first quarter of 2019 – despite the government shutdown and associated market volatility,” according to the analysis. “First-quarter increases in state and local government spending, along with accelerations in private inventory investment and in exports combined to deliver the surprisingly solid results.”

National credit union numbers, like Georgia credit union numbers, show that credit union members around the U.S. continued with typical patterns in the months following the shutdown. Savings showed strong growth at 4.5 percent nationally in Q1, compared to 1.1 percent growth in Q4, 2018 and 0.2 percent growth in Q3, 2018. Meanwhile, growth in lending eased – coming in at 0.6 percent growth in Q1 compared to 1.9 percent in Q4, 2018 and 2.6 percent in Q3, 2018.

What’s more, credit unions’ total saving growth numbers for Q1 of this year, both nationally and in Georgia, tracked closely with growth reported in Q1, 2018. In Georgia, total savings grew by 4.1 percent in Q1, 2018, while it grew by 3.9 percent nationally at the same time.

Georgia credit unions showed other indicators of healthy economic activity in Q1, too. For instance, loan delinquency rates remained low at 0.43 percent quarterly, while net income remained high at 102 basis points.

“First quarter trends usually reflect consumers using tax receipts and year-end bonuses to pay down loans or increase savings. It’s clear those trends were kept intact this year, despite the government shutdown,” said Mike Mercer, president and CEO of Georgia Credit Union Affiliates. “Whether or not the economy continues on this positive trajectory, it’s clear Georgia credit union members feel confident in their financial institution’s ability to help them afford life.”  

As of March, 2.2 million Georgians were members of credit unions, about 21 percent of the state’s population.

During the government shutdown, several Georgia credit unions focused efforts on assisting federal employees. For more on that coverage, click here.

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