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Inventory

The US Exposure To The ‘Goods Economy’ Remains

By |2015-09-22T18:21:29-04:00September 22nd, 2015|Economy, Federal Reserve/Monetary Policy, Markets|

The ISM for August was the lowest reading since the taper drama of 2013. At just 51.1, there isn’t any real basis for suggesting the manufacturing sector is even expanding (no matter what these sentiment surveys claim about that 50 dividing line). The “correct” interpretation is one which discards the exact figure for the relativism. For once, media commentary was [...]

Industrial Production Down Again In August; Past Revisions Suggest May Be Worse Than That

By |2015-09-15T15:58:43-04:00September 15th, 2015|Economy, Federal Reserve/Monetary Policy, Markets|

Industrial production contracted again in August at a rate (month-over-month) similar to that in June. That would suggest the rebound in July was the aberration since IP has now declined in seven out of the eight months this year. The year-over-year growth rate of just 0.9% would have been the worst of the “recovery” except that downward revisions forced June’s [...]

Retail Sales: Observation And Fantasy

By |2015-09-15T13:19:50-04:00September 15th, 2015|Economy, Federal Reserve/Monetary Policy, Markets|

If we go by the track of the “dollar” in setting economic expectations, we would expect to have seen a noticeable drop in economic activity in the first part of the year followed by a very tepid rebound lasting only a few months (“rebound” is too charitable of a qualifier, more like “not getting directly worse”). The ugly appearance of [...]

Factory Orders Starting To Register the True Risks

By |2015-09-02T11:50:25-04:00September 2nd, 2015|Economy, Federal Reserve/Monetary Policy, Markets|

Factory orders gained slightly month-over-month on a seasonally-adjusted basis but collapsed in year-over-year unadjusted terms. The latter was due, only in part, to base effects of the huge surge in July last year for Boeing. Even factoring that somewhat ill-suited comparison, factory activity is still way down and, as other indications, only undergoing a slight pause in the downward trend. [...]

‘Dollar’ As Demand + Inventory As Oversupply = Nothing Good Next

By |2015-08-17T15:56:37-04:00August 17th, 2015|Economy, Federal Reserve/Monetary Policy, Markets|

Last week, industrial production ticked higher but only somewhat while this week the Empire Fed manufacturing survey has caused extensive jitters to extend at least another week. Given those somewhat contrasting views on American industry they can be reconciled by simple timing matched against what the “dollar” has been doing across that period. Oil prices, that vital connection between “dollar” [...]

Wholesale Gap Actually Grows

By |2015-08-11T13:45:20-04:00August 11th, 2015|Economy, Federal Reserve/Monetary Policy, Markets|

Petroleum sales at the wholesale level grew to a year-to-date high in June. According to the Commerce Dept.’s latest estimates, crude oil sales jumped to $48.6 billion, seasonally-adjusted, from a low in January of just $41.9 billion. Though that seems like good news for a wholesale sector under tremendous inventory pressure, it means that absent that oil price effect wholesale [...]

The Inventory Imbalance Might Be The Worst Economic Factor For H2

By |2015-08-04T15:21:32-04:00August 4th, 2015|Economy, Federal Reserve/Monetary Policy, Markets|

With factory orders continuing to be much worse than they appear, it makes sense to try to measure the effect of over-optimism accounted by inventory. Recessions themselves were once almost exclusively set up by this one factor, as the difference between production and sales, caught up within the supply chain, eventually works out toward alignment. Companies are willing to hold [...]

For Once, BEA Matches Census

By |2015-06-24T16:48:14-04:00June 24th, 2015|Economy, Federal Reserve/Monetary Policy, Markets|

The inventory component in GDP, change in private inventories, was revised upward yet again forming the basis for the upward shift to -0.2%. At a $110.7 billion increase, the last four quarters have seen inventory gain by a combined $399 billion. That is the largest nominal expansion in history, and the most gained in terms of final sales since the [...]

Redefining Anomaly Through Inventory

By |2015-06-15T17:10:25-04:00June 15th, 2015|Economy, Federal Reserve/Monetary Policy, Markets|

While the latest business inventory estimates are not yet updated for May, only through April, there is still a great deal of consistency provided by the top to bottom shifts in the economic supply chain. It usually takes an inventory build of tremendous disproportion to trigger the kinds of cutbacks and downstream negative pressures that amount to a recession. The [...]

Peering Toward Q2

By |2015-05-29T16:13:25-04:00May 29th, 2015|Economy, Federal Reserve/Monetary Policy, Markets|

A couple more points about GDP revisions and the outlook for Q2. First, with inventory revisions factored, GDP less the inventory contribution was -1.03%; worse than last year’s polar vortex problem. It was the worst quarterly result since the Great Recession, which more than suggests economic weakness as more than just winter or seasonal adjustments. If there is any seasonal [...]

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