The U.S. economy continues to display forward momentum, but pockets of weakness are becoming more evident according to the latest economic study produced by the National Association of Credit Management (NACM).
While the Credit Manager's Index (CMI) manufacturing, services and combined numbers were all above the 50 mark indicating economic expansion, both the manufacturing and combined indexes fell from last month's levels.
The manufacturing sector index dropped 1.2% in August on a seasonally adjusted basis, as five of the 10 components fell. The fall was lead by a drop in sales of 7.7% and deterioration in the amount of credit extended, accounts placed for collections, and dollar amounts beyond terms.
"All three of the indexes experienced sharp drops in the sales and amount of credit extended components," said Euler Hermes ACI Chief Economist Dan North. "Drops in these top-line oriented measures bode poorly for continued growth, and confirm other softening macroeconomic indicators such as a weak job market, sluggish retail sales, an easing of inflation, and a housing market which until recently had been widely described as 'cooling' and might now be better characterized as frigid."