American small business borrowings soar in June
In June, American small business borrowing edged up, according to the data published on Thursday. However, that’s not enough to reverse three straight months of descend, pointing to sluggish economic growth ahead.
The Thomson Reuters/PayNet Small Business Lending Index went up to 138.9 in June, right from May's upwardly revised 131.1. By the way, it was down 5 percent compared to last year’s outcome because borrowings by companies in all key industry groups slumped.
The PayNet index normally corresponds to American gross domestic product growth just one or two quarters ahead. Meanwhile, the American economy soared 1.2% the previous quarter, a government report revealed the previous week, having registered a meager 0.8% in the first quarter.
Small business borrowing appears to be a key barometer of growth. It’s because small firms tend to do much of the hiring, which drives economic revenues. The figures issued on Thursday don’t suggest any big contribution to GDP from private companies.