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• CUNA: People realizing recovery 'not typical'
• Fewer members, consumers used credit in December
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	SAVINGS
	Regular Savings	0.39	0.28		CUs by 11 bp
	Interest Checking	0.28	0.21		CUs by 7 bp
	Money Market	0.71	0.45		CUs by 26 bp
	1 Year CD	1.36	1.06		CUs by 30 bp
	CONSUMER LOANS
	Reg Credit Card	11.65	12.89		CUs by 124 bp
	48 Mo New Car	5.03	6.19		CUs by 116 bp
	48 Mo Used Car	5.29	6.77		CUs by 148 bp
	36 Mo Unsecured	10.63	12.43		CUs by 180 bp
	MORTGAGE LOANS
	Home EQ LOC	4.45	4.93		CUs by 48 bp
	1 Yr ARM	4.17	4.54		CUs by 37 bp
	30 Yr Fixed	5.21	5.18		Bks by 3 bp
	All Data Current as of 02/08/2010. Based on 15849 institutions. Note: Average rates are listed; individual rates will vary. (See Datatrac Research Standards)				bp=Basis points (100 bp=1%)

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CUNA: People realizing recovery 'not typical'

MADISON, Wis. (2/9/10)--The loss of 20,000 jobs in January--more than expected-- indicates a slow recovery, and consumers are starting to realize that the economic recovery isn't a typical one, Credit Union National Association senior economist Mike Schenk told Investor's Business Daily's Investor.com Friday.

"People are sort of coming to the realization that this won't be a typical recovery," Schenk said. "It's going to be a long, slow slog."

The economy grew at a 5.7% annual rate in fourth quarter 2009, the biggest gain in six years, but the bulk of that was because companies are paring their inventories more slowly.

Economists expect much slower growth in the next few quarters and sluggish hiring. The average duration of unemployment is 30.2 weeks, compared with December's average of 29.1 weeks.

Some hopeful signs: Temporary jobs rose by 52,000, and existing staff worked longer hours. Companies often hire temps and work existing staff at longer hours before they hire permanent staff.

"It will be increasingly clear that the jobs market is improving, and we're slowly working our way out of this mess," Schenk said.

Resource Links

Investor's Business Daily article

Economic Data and Interest Rates

Fewer members, consumers used credit in December

WASHINGTON (2/9/10)--Consumers overall--credit union members included--borrowed less in December, according to Federal Reserve's consumer credit report released Friday.

Consumers borrowed nearly $2.5 trillion--an 0.8% or $1.8 billion drop from November, seasonally adjusted, said the Fed. December's total was the 11th consecutive month that consumer credit had declined, as consumers reduced debt to weather the recession (Business Week Feb. 5.)

For fourth quarter 2009, consumer credit dropped at an annual rate of 4.75%, while revolving credit decreased 13% and nonrevolving credit was unchanged.

U.S. revolving credit totaled $866 trillion, down 11.7% or $8.5 billion, while non-revolving credit totaled nearly $1.6 trillion--an increase of 5.2% or $6.8 billion. The Fed attributed the increase in non-revolving credit to car sales. In December, nearly $30.6 trillion in new-cars were financed, up $92 billion from November.

Credit union members borrowed $236.4 billion in December from their credit unions. That is down slightly from $237 billion in November. The Fed's credit union statistics are not seasonally adjusted.

Revolving credit at credit unions totaled $35.5 billion in December, an increase over $34.6 billion in November while credit unions accounted for $201 billion in nonrevolving credit in December, compared with $202.3 billion in November.

Resource Links

The Fed's Consumer Credit Report

Market News

MADISON, Wis. (2/9/10)

• Global business confidence is slowly improving, according to Moody's Economy.com Survey of Business Confidence. The four-week moving average of sentiment increased for the week ending Feb. 5 to its highest level since just before the start of the worldwide recession in late 2007. Sentiment is roughly even around the globe, with South Americans slightly more positive and North Americans a little less positive, Moody's said. However, despite an overall uptick in confidence, businesses remain cautious--consonant with only a tentative worldwide economic recovery, analysts said. Businesses are most optimistic when responding to more general questions about current conditions and the outlook heading into this summer. Businesses stay cautious when responding to specific questions about hiring, inventories, pricing and sales, analysts said (Moody's Economy.com Feb. 8) ...

• The U.S. dollar is as valuable today as it was 35 years ago, analysts said. The dollar is up about 3% since 1975 when measured against currencies for the Group of 10 nations proportioned by how they trade against each other, according to the Bloomberg Correlation-Weighted Currency Indexes. 1975 was four years after the disintegration of the Bretton Woods agreement--established in 1944 to link currencies to the price of gold. The United Kingdom pound has fallen 34% since then, and the Canadian dollar has dropped 5%. After losing 12% in the first 11 months of 2009, the U.S. dollar gained 6% since November, as recorded by the Bloomberg index. In 2010 and 2011, the U.S. will grow more quickly than the rest of the developed world, said Barclays Capital and Morgan Stanley. "To quote Mark Twain, the reports of the dollar's demise have been greatly exaggerated," said Win Thin, a senior currency analyst at Brown Brothers Harriman & Co (Booomberg.com Feb. 8) ...

• On Monday, the Federal Reserve offered $50 billion in 28-day credit through the Term Auction Facility. Participants have to submit bids by phone to their local Reserve Bank between the opening time and closing time on the bid submission date. Reserve Banks will notify individual institutions in their districts that have submitted winning bids. Summary auction results will be published on the website of the Board of Governors of the Federal Reserve System. For the Federal Reserve press release, use the link ...

News of the Competition

MADISON, Wis. (2/9/10)

• Regulators closed 1st American State Bank of Minnesota in Hancock, Minn., Friday, bringing the total number of bank failures this year to 16 after 140 failed in 2009, according to the Federal Deposit Insurance Corp. (FDIC). The bank's two branches reopened Monday as branches of Community Development Bank FSB, in Ogema, Minn. At the end of 2009, 1st American State Bank of Minnesota has roughly $18.2 million in total assets and $16.3 million in total deposits. The FDIC has estimated that the cost of the bank failure announced Friday to the Deposit Insurance Fund will be $3.1 million ...

• CIT Group Inc., a commercial lender that surfaced from bankruptcy in December, named John Thain, the ousted chair of Merrill Lynch & Co., to lead it. The appointment culminates a four-month search to find a replacement for Jeffrey Peek, who stepped down Jan. 15 after leading the firm since 2004. Peter Toobin was named interim CEO when Peek left. The appointment places Thain once again as head of a public company. He was forced out by Kenneth D. Lewis, then CEO of Bank of America Corp.--which bought Merrill Lynch during the 2008 financial crisis. CIT was damaged by Peek's venture into subprime lending before its bankruptcy, analysts said. The company still operates under constraints levied after a 2008 federal bailout, and is being kept out of the commercial paper market--its usual source of funding, analysts added. "If he can pull this off, he's going to be king," said Brian Charles, a debt and equity analyst with R.W. Pressprich & Co (Bloomberg.com Feb. 8) ...

• The Mortgage Bankers Association (MBA)--saddled with real estate whose market value had dropped well below the amount it owed lenders--had to sell a building at a loss, analysts said. However, the mortgage lenders' trade group will not provide terms of the deal it cut with creditors to get out of the predicament, they added. CoStar Group Inc., a provider of commercial real estate data, said Friday it had agreed to purchase the MBA's 10-story Washington, D.C., headquarters building for $41.3 million. The price is significantly below the $79 million that MBA had agreed to pay for the building in 2007 while it still was being constructed--when the property bubble was near its zenith, analysts said. John Courson, MBA CEO, would not say if the trade group would pay off the full loan amount, analysts said. "We're not going to discuss the financing," Courson said (The Wall Street Journal Feb. 8) ...

• Responsibility for the fundamental weakness of the European monetary union--underscored by fears about escalating Greek, Portuguese and Spanish indebtedness--is on the shoulders of Jean-Claude Trichet, president of the European Central Bank, analysts said. Because the European monetary union has no strong political arm to ensure members observe limits set by treaty, the responsibility to resolve the crisis defaults to Trichet, they added. Last week, Trichet told European governments they need to quickly lessen their budget deficits. "When you share a single currency with others, the counterpart is that you have to have a sound fiscal policy," he said at the bank's monthly policy meeting (The New York Times Feb. 8) ...