Expert Forecasts What CUs Should Watch in Economy Going Forward

Dr. Robert Eyler, president of Economic Forensics and Analytics, board member of Redwood CU, and economist at Sonoma State University
Dr. Robert Eyler, president of Economic Forensics and Analytics, board member of Redwood CU, and economist at Sonoma State University

Are California and Nevada’s current economic recoveries “V, U, L, W, or K shape”? They are increasingly looking K-shaped according to Dr. Robert Eyler, a breakout session speaker on Monday, Oct. 26 during the kickoff for REACH 2020.

Going forward, a lot will depend on how local COVID-19 pandemic cases break out with respect to low and middle-income households versus higher-income households and workers (many able to work remotely). Eyler touched on this and many other economic hot topics being discussed across California and Nevada.

“We should expect to keep growing because we have a lot of monetary and fiscal policy in play,” Eyler said. “Monetary policy is going through its normal recovery mechanisms and bearing some fruit. The amount of liquidity is historically large. But going forward, there’s a split in the forecast when it comes to fiscal government stimulus.”

He touched on the fact that credit unions are experiencing a time of extraordinary change, and a historical economic bounce-back is poised for the third quarter of 2020.

However, “because of the deep hole we’re in, it’s going to take some time to even come back to where we would have been if the pandemic never happened,” Eyler said. It’s going to take a couple years just to get back to where the economy stood in February 2020, and longer to play catch-up to where the economy would have been.

“When businesses become stable, they tend to hire back workers,” he added. “And then that stabilizes the local labor and housing markets. What will affect California is whether the state sees even more residents migrating out of certain areas, as well as the potential speed-up of worker automation. Is this all just cyclical change? It’s something to watch going forward.”

What’s the good news? Households are in “great shape” compared to when the economy went into recession back in late 2007. Challenges, though, still remain.

“The longer unemployment recovers more slowly versus rapidly, the higher threat of loan defaults.”

You can watch Dr. Robert Eyler’s session and also catch the entire conference in real-time or on-demand! Click here to experience this exclusive virtual conference on Oct. 26, 28 and 29, and Nov. 4 and 5. REACH 2020 is one of the credit union industry’s premier annual events, drawing leaders and system partners from across California, Nevada and the United States.

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