According to the most recent data from the National Association of Credit Management, indicators for May were down, especially in the unfavorable categories.

NACM noted that this behavior is pretty consistent with the other numbers that have been emerging as far as the economy itself.

“The wild enthusiasm that was noted at the start of the year has faded as reality sets in,” said Chris Kuehl, NACM economist. “There will be few swift changes or victories as far as the economy is concerned. Tax reform, infrastructure build, deregulation and all the rest will be slow to appear and it is not clear that business and consumer will have sufficient patience.”

The data this month is not exactly bad, but it has fallen off the pace that was set last month. The combined reading for the index as a whole fell to 53.6 and that is the lowest it has been since November of last year. To be sure, a number of 53.6 is not a crisis but just a month ago it was at 55.8. The index for the favorable factors fell as well but stayed in the 60 range (by the narrowest of margins). It went from 63.6 to 60.0. The index for the unfavorable factors went down to below the 50 range and that is a bigger concern. Last month the reading was 50.6 and now it stands at 49.3, and that is as low as it has been since August of last year.

“The trouble that has been brewing has started to get palpably worse,” Kuehl said.

The favorable subcategories all slipped a little and most fell out of the 60s this month. The sales category went from 63.8 to 60.6 and it has not been that low since January. The new credit applications number slipped out of the 60s by moving from 62.0 to 59.3. The dollar collections data also slipped into the 50s by moving from 61.2 to 56.7, and this reignites the concern from March when there was a similar decline in dollar collections.

“There had been some hope that dollar collections were trending back up and that this was a signal that companies were starting to think expansion again,” Kuehl said. “Now we are not so sure. The amount of credit extended slid from 67.2 to 63.6 and that is certainly still in respectable territory.”

The really bad news surfaced in the unfavorable categories.

“The rejections of credit applications actually rose a little from 52.1 to 52.4 and that would suggest one of two things,” Kuehl said. “Either the applicants that are trying for additional credit are in good shape or those that issue credit are being more generous.”

The data for accounts placed for collection worsened a little from last month as the reading went from 49.0 to 48.5. This data has been sub-50 for a long time now and that is not a good trend overall. The disputes reading took a big hit as well, as it moved from 49.1 to 47.9. The dollar amount beyond terms reading collapsed from 51.0 to 45.9 and that is the other concern from March that has reappeared.

“The combination of more slow pays and weaker dollar collection means that there are still considerable struggles in terms of paying and there is renewed worry that other negatives will start to accelerate,” Kuehl said.

The dollar amount of customer deductions fell as well, going from 49.2 to 48.7, and there were negative readings in the filings for bankruptcies category as it went from 53.5 to 52.7.

“The sense right now is that companies are less upbeat than they were earlier in the year,” Kuehl said. “The big growth opportunities have not materialized as yet, but there remains some hope they will. The other measures of the economy have been showing some of this angst as well, as the Purchasing Managers’ Index has been down from previous heights and the latest durable goods numbers were a little off their recent peak.”