The National Association of Credit Management's economic report for November 2012 has shown that it has regained the losses seen back in October. The reading jumped to 55.2 in November from 54.4 in October. While this is not a widely tracked economic indicator, it does signal that creditors are at least loosening up some of those purse strings that have been so tight with rates at such low levels.
Today's reading of 55.2 for November is still under the highs of 55.8 in February and 56.2 in March, but it is at least back to the same levels seen in August and September. The report said:
The most important jump was in sales, which climbed from 57.4 to 60.4. It is always encouraging to see the data cresting past 60, and this marks the best sales month since August when the reading was at 62. However, the best improvement in the favorable factors was in dollar collections, as it improved from 54.6 to 61.3. … As companies begin to get current on their credit, they are often motivated by the need to ask for more credit for expansion. First they catch up and then they ask for more credit and that appears to be happening again. The only favorable factor that weakened was new credit applications, which fell from 56.6 to 56.5.
More volatility was seen in the unfavorable categories, causing a decline in the overall unfavorable index. Every indicator except dollar amount beyond terms, which rose from 48 to 49.9, slipped.
Of the other unfavorable factors:
… dollar amount of customer deductions slipped just under the 50 mark to 49.7, suggesting some negotiation is taking place between good customers and their creditors.
JON C. OGG
Filed under: 24/7 Wall St. Wire, Economy