The September report from The National Association of Credit Management is out with a positive headline and a positive bias at the start. The problem is that the gains have caveats and the report is on the heels of a slipping reports from outlooks for the rest of the year from CEOs and CFOs released earlier this week.
The September Credit Managers Index fell to 55.3 versus 55.8 in August and the group is conveying that this implies some momentum will carry into the fall. Here is the issue. It stated, “The rebound in August was expected to continue into September, but that was not the case for sales, and may be the most worrisome of the figures. Without some expansion in sales, the other categories may start to slump as well.”
The gains made in the CMI in August showed an economy with an overall better performance than earlier in the year and that August report matched the highest reading so far in 2012. Further noted was that the index has only been at or above this level three times this year and the CMI indicates that it appears to be more secure than originally assumed. There was a slight decline in the favorable factor index to 59.5 from 62.0 due mostly to a reversal of the sales number, and that was the second lowest point reached in over a year.
While this is not a market moving indicator, the report does at least contrast marginally with some of the prior reports. Maybe less-bad isn’t so bad.
JON C. OGG