WAIN Street Reports Stabilization of Nationwide Business Credit Quality

Business Default Index Edges Up 0.06%
Business Default Diffusion Index Deteriorates to 52.10

WAIN Street reported Thursday that the Business Default Index closed the month of August at 6.09% —up 0.06% from July’s reading of 6.03%.  The index is quoted as a seasonally adjusted, annualized default rate.  An increase in the index corresponds to deterioration in credit quality.  Current index quarter-to-date and year-to-date values are better than comparable previous levels and point to stabilizing business credit quality.

The associated Business Default Diffusion Index that captures the degree to which individual business’ credit quality deteriorates or improves closed at 52.10 corresponding to a narrow margin of 4.2%—in August 4.2% more businesses deteriorated in credit quality than improved.

Vidur Dhanda, Publisher, WAIN Street, said Thursday, “August 2013 saw a number of indicators point to the economy losing steam—slowing capital spending, restrained business hiring, and cooling consumer spending.  August index levels reinforce the “flat to decreased” trend exhibited by the majority of economic gauges.”

The WAIN Street Business Default Index is computed monthly based on the credit performance of nearly 18 million US businesses that have been tracked by WAIN Street for over 12 months.  WAIN Street’s newsletter, Taking the Pulse, helps readers peel back the layers and zoom into the nuances and variations in business credit quality.