move along please
Bank credit from commercial banks (GRAPH) is a good barometer of the economy. The graph below shows the year-over-year percentage change in commercial credit. A reading of 5% means that commercial credit expanded by 5% over last year at this time. The shaded areas represent official recessions and the graph shows clear and sharp declines as the economy enters a recession. Most recessions bottom with 2-7% increases (over the previous year). This is the first downturn where total commercial credit turned negative. Over the last year or so total commercial credit has declined about 5%. Presumably, the economy will not recover until this statistic bottoms, changes direction, and turns positive for an extended period of time. HT to Chad.