The December Credit Managers' Index (CMI) matched the mood of the economy as a whole-essentially flat, but showing some mild progress. The most important aspect of the report is that the index remained above the 50 mark that separates growth from contraction and even showed a slight gain as it moved from 52.3 to 52.9. "This is hardly the kind of advance that provokes celebration, but given the gloomy assessments made about the 2009 holiday season, the gain is certainly preferable to what had been anticipated," says Chris Kuehl, economist for the National Association of Credit Management (NACM).

The indicators that showed the least movement included sales and new credit applications. "This is to be expected and is consistent with December readings in past years," says Kuehl. "This is the period in which most manufacturers are in semi-hibernation unless the retail community is frantically trying to bolster inventory. That was not the strategy employed by retail this year; stores held the line on inventory and shoppers eventually caved and bought what was available."

The overall conclusion from this month's data is that the economy remains weak, but headed in the right direction. The slow thaw in the credit markets is still taking place and there are signs of expansion in both the manufacturing and service sectors. There has been no sign of explosive growth thus far, but that is consistent with most of the other assessments on the economy. The improvement in 2010 looks more feasible, but there are still no fireworks in the immediate future.

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