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Chart: US Credit Managers' Index

This week the attention falls on the popular Purchasing Managers' Indexes (PMI) as just about every country in the world provides a timely insight into how their economy is tracking. But one report that often flies under the radar is the US Credit Managers' Index (CMI) which provides an insight into the US economy and in particular - credit conditions. The June CMI data showed overall steady credit conditions, but there remains a gap between the path of the improving "Favorable" components and the more lackluster "Unfavorable" components. This gap has persisted since opening up in 2017, as factors such as sales, new credit applications, and credit extended have held up at solid levels, while the unfavorable factors like disputes, accounts placed for collection, and dollar amount beyond terms all remain insipid; chopping around and below the critical 50-point line of delineation for improvement vs deterioration. It's important to keep track of credit conditions, not just for gauging the path of the economy but also in analyzing credit spreads. For now it is still giving the all-clear, but that could change.

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