Magazine article Business Credit

August CMI Improves, but with Some Setbacks

Magazine article Business Credit

August CMI Improves, but with Some Setbacks

Article excerpt

August's Credit Managers' Index (CMI) climbed out of last month's lower index, with a combined score of 55.2, compared to July's 53.4. NACM Economist Chris Kuehl, Ph.D., said the economy remains in a "transition phase," with readings that do not follow a pattern, shuffling from lower to higher readings.

"The CMI was not the only indicator that experienced a reversal of fortune, but while that trend seemed to be on the upswing for some, there were those readings that showed further decline," Kuehl said. "In short, there is a little something for both the glass-half-full and the glass-half-empty crowds."

August's index falls back in line with June's reading of 55, but the index this month still falls short of May's 55.7. While in the shadow of May's index, the combined score for August's favorables reached the 60s after last month's reading in the upper 50s. The combined unfavorables also saw improvement, staying in expansion territory at just under 51.

The combined sales category in favorables saw a strong improvement, climbing up six points from last month to a comfortable 64.4. Lower than the previous months, new credit applications shifted one-tenth of a point to 60.9, meaning creditors are exercising more caution. Dollar collections improved, jumping from the mid-50s to an even 60. The amount of credit extended also reached the 60s after being in the 50s in July.

The unfavorables remained lower than the favorables, with two categories in contraction (a score below 50). …

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