Thomson Reuters/PayNet Small Business Lending Index dropped in
November to 127.4 from a downwardly revised reading of 129.9
reading in October. It was the lowest level since February.
"Small business has suddenly decided to hold off on investment
to produce more goods and services," said Bill Phelan, President
Business owners may be waiting to see how the Fed's widely
anticipated rate increase, the economic slowdown overseas, and
this year's U.S. presidential race play out before undertaking
many new investments, he said.
Still, the lending index was up from a year earlier, suggesting
businesses may contribute some amount of growth to the economy,
The index, which hit a record in June, has historically tracked
ahead of U.S. gross domestic product growth by two to five
The U.S. economy grew at a 2.1 percent annual pace last quarter,
a pace that's expected to cool to 0.7 percent this quarter,
according to the latest modeling by the Atlanta Fed.
The Federal Reserve last month raised the range of its benchmark
interest rate by a quarter of a percentage point to between 0.25
percent and 0.50 percent from near zero, where it had kept
short-term borrowing costs since December 2008.
Central banks typically use rate hikes to slow growth and keep
inflation in check.
The delinquency rate on loans more than 30 days past due ticked
up to 1.46 percent in November, separate data from PayNet
PayNet collects real-time loan information such as originations
and delinquencies from more than 325 leading U.S. lenders.
(Reporting by Ann Saphir; Editing by Alan Crosby)
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