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The seasonally adjusted Credit Manager's Index for May rose to 45.4 from 44.3 in April, marking the fourth consecutive month the index has increased, according to a report released today by the National Association of Credit Management. The index, a gauge of economic factors affecting credit and collection professionals, was down 6.7 points from 52.1 in May 2008, but it is the highest since October when the index was 45.2, reports Collections & Credit Risk, a CardLine sister publication. Any score below 50 indicates economic deterioration. The index consists of four favorable factors, such as the amount of credit extended, and six unfavorable factors, such as accounts placed for collection and bankruptcy filings. "The [Credit Manager's Index] data, combined with various other measures, suggest that the economy finally reached its lowest point [during the first quarter] and has been in the recovery stage since then," Chris Kuehl, the association's economist, states in the report. The trend does not mean the economy will come "roaring back" in the next few months, but the second quarter will be the last quarter of negative gross domestic product because the third quarter should show some growth, Kuehl said.
