Credit consistency in the August economic report from the National Association of Credit Management provides reason to be optimistic about conditions for the rest of the year and should help quell fears of inflation.
Columbia, MD: August 29, 2014â€”Consistency is generally a positive development when the overall readings have been positive and this is the case for the August report of the Credit Managersâ€™ Index (CMI) from the National Association of Credit Management, which posted no change from Julyâ€™s 56.8. This marks five months of readings between 56 and 56.8 and given the volatility in the economy as a whole for this period, this stability in credit is a positive signal as far as the rest of the year is concerned.
â€śThe August CMI reflects a more optimistic future, but not an economy that is likely to surge,â€ť said NACM Economist Chris Kuehl, PhD. â€śIn comparing this monthâ€™s reading to that reported by the Federal Reserve, it is easier to understand the optimism about the last half of the year, as well as the worry about the impact of inflation fueled by some of this growth.â€ť Nearly all the indexâ€™s readings reflect that same stability, though there was noteworthy movement in both the favorable and unfavorable factor indices. Kuehl noted the same stability in various important data streamsâ€”capacity utilization between 78% and 79.7% over this periodâ€”just a little shy of what is considered normal. Stability also appears in terms of capital expenditure. â€śThese measures stand in stark contrast to the wild gyrations in the overall growth rate as first quarter numbers were in recession territory at -2.1%, while the second quarter boasted a gain of over 4%,â€ť Kuehl said.