October was a very strange month for business and government alike. The federal government shutdown ground down many operations to a stall or outright closure. It turns out that business credit still managed to squeeze out a small gain despite the uncertain economic climate. If this report’s “leading indicator” status is true, then 2014 could be off to a better start than many are expecting.

A report issued on Thursday was October’s Credit Managers’ Index from the National Association of Credit Management (NACM). The index managed to gain slightly, from 56.6 in September to 56.7 in October. What was interesting here is that this was still somehow the highest reading in more than a year and a half.

Recent declines in retail, consumer confidence and industrial production all seemed to bear out the most pessimistic predictions. The NACM forecasts that each Credit Managers Index report tends to lead other indicators by approximately three months.

The NACM said:

The dominant story for the bulk of the last quarter was the political impasse that resulted in a government shutdown for three weeks and posed a threat to the U.S. credit rating. Everyone was hanging onto the edge of their seats to see what this would do to the economy. Predictions ranged widely from utter financial chaos to no real response at all.

Here were some brief observations:

• The favorable factors index rose from 60.9 in September to 61.5 in October.
• Sales slipped from 62.7 to 62.5.
• New credit applications rose from 57.4 to 58.5.
• Credit extended rose from 62.9 to 63.8.
• The overall unfavorable index declined from 53.8 in September to 53.6 in October.
• Credit applications fell from 53 to 52.1.
• Accounts placed for collection fell from 54.3 to 53.3.

24/7 Wall St. normally might not cover this report, but it was interesting to see at a year-and-a-half high, even during the peak panic of October. Maybe this is why you are not seeing a broadly atrocious wave of guidance from domestic business this earnings season. If it is a leading indicator for three months out, it may also be signaling that 2014 is going to be off to a better start than many of the cautious pundits may think.

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.