NACM Credit Manager's Index: report for January 2009.(CMI)(Report)

The seasonally adjusted Credit Manager's Index (CMI) fell 0.4% to a record low of 39.7 in January, its sixth consecutive decline. All 30 components in the indexes are below the 50 level signaling economic contraction; 13 are even below 40, suggesting a powerful recession and 13 are at record lows. Seven of 10 components fell in manufacturing sector, six of 10 in the service sector. "It was another grim report," said Daniel North, chief economist with credit insurer Euler Hermes ACI, who evaluates the data and prepares the CMI report for the National Association of Credit Management (NACM). "Similarly, much of the recent economic data has been worse than expected, suggesting that the economy's decline may actually be accelerating," he continued.

"There is some positive news however" said North. "Over the past few months the indexes have been subject to dramatic, almost sickening declines, like the 11.7% drop in manufacturing sales last month. This month's report seems almost sedate by comparison as the worst fall was only 4.4%. In addition, some of the respondents actually had some good news to report this month, apparently seeing a tiny glimmer of light in the darkness. There might also be the slightest hint of a bottom in the housing market, and there might also be some barely visible cracks in the frozen credit markets."

"Combine all this with super loose monetary policy, plummeting energy prices and some new ideas from a new administration, and the optimism expressed by a few ...