Is an Upturn in Corporate Debt Growth Imminent?
ECRI has just updated its U.S. Leading Credit Index (USLCrI). The value of this index lies in its ability to predict cyclical turns in nonfinancial corporate debt growth.
Despite massive Fed easing, following the earlier downturn in the USLCrI, nonfinancial corporate debt growth has been weakening since late 2011, falling to a one-and-a-half-year low in its latest reading. But, with banks easing credit standards a bit, some wonder if corporate debt growth is about to start rising, with positive implications for the broader economy.
The latest update to the USLCrI clarifies the future trajectory of nonfinancial corporate debt growth, indicating whether debt growth is likely to improve noticeably anytime soon.