U.S. small-business borrowing falls in August: PayNet

Borrowing by U.S. small businesses fell for a second month in August, an index released Thursday showed.   


The Thomson Reuters/PayNet Small Business Lending Index fell to 136.1 in August from a July reading of 144.1. It was up 14 percent from the level a year earlier.

The index, which hit a record in June, has historically tracked ahead of U.S. gross domestic product growth by two to five months.

U.S. GDP expanded at a 3.9 percent annual pace last quarter, although growth is expected to cool in the second half of the year.

The decline in small-business borrowing is consistent with that expectation and may do little to sway the case for a U.S. interest-rate increase. Federal Reserve chief Janet Yellen has signaled she still plans to raise rates this year, but would need to see "some further improvement in the labor market" and more confidence on the inflation outlook before doing so.