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This chart tracks the Private Payroll Employment (green line) and Commercial and Industrial Loans (blue line) and its one of my favorite economic charts because it uncovers how confident employers, lenders and borrowers are in the future.
- A lender will only lend to a business if they feel the business will have enough sales to pay the loan back.
- A business owner will only borrow if they feel the business will be able to support additional debt.
- Additionally you can only have a loan if both the lender and borrower believe things are improving.
- The latest readings shows loan volume is up $249.5 billion during 2012.
- An employer will only hire more workers if they feel sales will support additional payroll.
- The latest reading shows Private Payrolls are up 3.26 million workers.
As background, Commercial and Industrial Loans are loans typically made to medium sized businesses that are too large to be financed with their owners’ credit cards or personal loans but too small to access the stock market.
More background, I track Private Payroll rather than Total Employment because Total Employment includes government workers and there are times when the government hires and/or fires workers for political instead of economic reasons.
