You are here
US small-business borrowing rose in September: PayNet
[WASHINGTON] US small businesses boosted borrowing in September, an index released on Monday showed, a sign that more firms are betting on an increase in household spending in the coming months.
The Thomson Reuters/PayNet Small Business Lending Index increased to 140.4 in September from a downwardly revised reading of 135.6 reading in August. It was up 11 per cent from a year earlier, led by firms borrowing in the transportation, warehousing, construction, accommodation, food, healthcare and real estate industries.
"It's consumer, consumer, consumer," said Bill Phelan, President of PayNet. "This above-average growth trend means that small business is going to deliver material amounts of growth to GDP in the fourth quarter." The index, which hit a record in June, has historically tracked ahead of US gross domestic product growth by two to five months.
US GDP growth cooled to a 1.5 per cent annual pace last quarter, although consumer spending was a bright spot.
The Federal Reserve said last week it will decide whether to raise rates in December based on actual and projected progress toward its goals of TWO-per cent inflation and full employment.
Many officials see economic growth of 2 per cent or more as strong enough to bring the unemployment rate, now at 5.1 per cent, down further.
The Atlanta Fed currently forecasts US growth of about 2.5 per cent in the current quarter.
The delinquency rate on loans more than 30 days past due ticked up to 1.45 per cent in September from 1.44 per cent the prior month, separate data from PayNet showed.
PayNet collects real-time loan information such as originations and delinquencies from more than 250 leading US lenders.