Reasons behind the large declines in the September report from the National Association of Credit Management are not easily determined. The month may be just another anomaly, or a far more consequential indication of an end to the recent period of economic growth.
Columbia, MD: September30, 2014â€”The September report of the Credit Managers' Index (CMI) from the National Association of Credit Management fell to 54.9 from 56.7. While still firmly in the growth category, this is the lowest reading in nearly two years. Not even the Polar Vortex months were this weak and the collapse was felt in a variety of categories. This was not a good month and that brings a great many concerns to the forefront.
"This was not a small reversal of fortune by any stretch of the imagination," said NACM Economist Chris Kuehl, PhD. "This could be termed a collapse, and it begs a very important question. Which is correct: the Purchasing Managers' Index or the Credit Managers' Index?" In past years, it has been noted that the CMI tends to predict the pattern that will be seen in the PMI in the next month or two. "If that assessment continues to be accurate, the economy as a whole may be in for a very rude awakening," Kuehl said. "The numbers this month are almost shocking and there will be intense interest in what the index reports in the next iteration as this will determine whether this is the start of a depressing trend or just one of those anomalous months. The one factor that may provide some hope is that August and September are often difficult to get an accurate read on given the vagaries of the summer break and the return to school."