| Sept 2
Sept 2 Borrowing by U.S. small businesses dipped
slightly in July from a record level the previous month, an
index released Wednesday showed, but its relative strength was
seen as a sign of domestic momentum despite the recent
volatility in global markets.
The Thomson Reuters/PayNet Small Business Lending Index
edged down to 145.2 from an upwardly revised June reading of
146.4, but the readings marked the index's two highest points
since it was launched in 2005.
The July reading, up 13 percent from the same month a year
ago, was driven by robust activity in key sectors like
transportation and construction, said PayNet founder Bill
"This is showing some strength - while foreign markets are
falling, while corporations are pulling back on their
investments," Phelan said. "We've got this small business
economy anchoring the U.S. economy."
The small-business borrowing index has historically been a
leading indicator of U.S. gross domestic product by two to five
months, and is also a good predictor of capital spending and job
growth, Phelan said.
GDP expanded at an upwardly revised 3.7 percent annual rate
last quarter, buoyed by consumer spending.
The data comes as the Federal Reserve is weighing whether to
increase U.S. interest rates from near zero, where they have
been kept since December 2008.
A recent stock market selloff has given some Fed officials
pause and prompted investors to cut their predictions of a
September U.S. rate hike to about 32 percent.
But Phelan said the high levels of borrowing, spread evenly
throughout the United States and across most industries, augur
economic strength and financial health in the small business
Small businesses have "a lot of capital to borrow, a lot of
capital to invest more when the opportunity presents itself,"
Phelan said. "That means there's ... a lot of runway for GDP
PayNet collects real-time loan information such as
originations and delinquencies from more than 325 leading U.S.
(Reporting by Megan Cassella, editing by G Crosse)