The Economics of Credit

Among many companies, the mindset that determines policy for the simplest, most tactical credit and accounting decisions is influenced on a larger scale by economics. Striking the appropriate balance between standards and economics is a key ingredient in sustaining growth and profitability. This section will track select credit-related economic statistics such as short-term interest rates, GDP and inflation and show how policy making at the highest levels affects credit decisions on the lowest levels.

Recent Articles

U.S. Consumer Price Index Rises to 5%

July 16, 2008

Hello inflation? The Consumer Price Index (CPI) reaches 5 percent from the 4.2 percent figure recorded last month, according to data released earlier this morning from the U.S. Department of Labor. This is the highest level for the CPI since the 5.3 percent increase in February 1991.

The CPI increased 5 percent in June from the previous level recorded in June 2007. As a result, prices have now entered the 5 percent range for the first time in 17 years, perhaps, the firmest indication yet that difficult times are on the horizon.

1st Quarter 2008 GDP Rises 0.9%

May 29, 2008

Real gross domestic product (GDP) continues to stay in positive territory despite lower consumer sentiment and higher credit worries, however, a closer look at the numbers reveal potential trouble ahead.

Driven largely by service exports and government spending, the U.S. gross domestic product increased at an annual rate of 0.9 percent in the first quarter of 2008, according to preliminary information released today from the U.S. Commerce Department. The preliminary rate of growth surpassed the advance estimate by 0.3 percent. The final figure, based on more complete data, will be released on June 26th.

Fourth Quarter GDP Remains Positive at 0.6%

March 27, 2008

Real gross domestic product increases for the fourth consecutive quarter in 2007; the 25th consecutive quarter of growth. The U.S. economy has not receded since the third quarter of 2001.

Don't tell the banking industry and most of those on Wall Street, but the United States economy is still growing albeit at the slowest pace since the first quarter of 2007, according to the finalized figures released earlier this morning from the U.S. Commerce Department.

U.S. Trade Deficit Increases 9.1%

January 11, 2008, 9:30 am ET

The U.S. trade deficit in November increased $63.1 billion, or 9.1%, from the $57.8 billion revised amount for October, according to information released today by the U.S. Commerce Department. The deficit in manufactured goods increased to $72.7 billion while the services surplus increased to $9.6 billion.

Third Quarter GDP Grows 4.9%

December 20, 2007

Real gross domestic product increases for third consecutive quarter in 2007.

In spite of what you may be hearing, reading or feeling, the economy is growing, not receding, and at a rather brisk pace too based on the finalized figures released earlier today from the U.S. Commerce Department.

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