NACM Credit Manager's Index report for June 2006.(CMI)(National Association of Credit Management)(Statistical data)

"The Combined Credit Manager's Index (CMI) rebounded sharply in the month of June, reversing much of May's precipitous losses," said Dan North, Chief Economist with credit insurer Euler Hermes ACI. On a seasonally adjusted basis, the CMI rose 2.3% to 57.2%. "Dollar Amount Beyond Terms and Accounts Placed for Collection showed the strongest improvement," he added; "It suggests that customers have experienced an improvement in cash flow." While the CMI continues to indicate economic expansion, it is important to note that other than last month's trough of 54.9, the Index has not been lower than this since last October. "This data suggests that while the economy is still growing, the rate of that growth is declining," summarizes North.

Similarly, in its statement accompanying the 25 bps increase in the Fed Funds Rate on June 29th, the Federal Open Market Committee noted that "Recent indicators suggest that economic growth is moderating from its quite strong pace earlier this year; partly reflecting a gradual cooling of the housing market and the lagged effects of increases in interest rates and energy prices." "In other words," said North, "as the Fed and the CMI indicate, the three major headwinds on the economy ...