Despite the threat of a political impasse in the United States that some thought could derail the entire global economy, October’s Credit Managers’ Index (CMI), issued by the National Association of Credit Management (NACM), was largely unfazed. The combined CMI actually improved slightly in October, marking the highest reading in over a year and a half.
The October CMI may have been the most watched in years, according to NACM Economist Chris Kuehl, PhD. "The dominant story for the bulk of the last quarter was the political impasse that resulted in a government shutdown for three weeks and posed a threat to the U.S. credit rating," he said. "Everyone was hanging onto the edge of their seats to see what this would do to the economy.”
Look for surprising data in the October CMI’s favorable factors index, and particularly positive readings in new credit applications and amount of credit extended. Kuehl believes some of the activity means companies confidently expect improvements in the economy by 2014.
If the October CMI reflected any of the negative economic effects of the political brinksmanship in Washington, it did so in the unfavorable factors, specifically in categories like rejections of credit applications and accounts placed for collection. Still, the overall unfavorable index has by and large remained somewhat stable and trended in the right direction.
The complete CMI report for October 2013 will be available Thursday at the NACM website and contains more commentary, complete with tables and graphs. CMI archives may also be viewed on NACM's website.