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Wholesale trade

Summary:
As previously discussed, GDP was only as high as it was due to increases in unsold inventory- not good! Wholesale TradeHighlightsWholesalers had been keeping their inventories down as sales have slowed but they got behind in January. Inventories rose 0.3 percent in the month which isn’t alarming in itself but relative to sales, which fell 1.3 percent, inventories look heavy. The stock-to-sales ratio rose two notches to 1.35 from 1.33 for the highest reading of the recovery, since April 2009.Industries where inventories rose relative to sales include furniture, farm products, computers, and autos. Very few industries at the wholesale level show leaner levels in the month.Year-on-year, wholesale inventories are up 2.0 percent against a 3.1 percent decline for sales. Increases for inventories are a positive for GDP calculations but not for the production or employment outlooks nor for business confidence. Heavy inventories were a question during the fourth quarter and may be becoming one for the first quarter as well.

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As previously discussed, GDP was only as high as it was due to increases in unsold inventory- not good!

Wholesale Trade
Wholesale trade
Highlights
Wholesalers had been keeping their inventories down as sales have slowed but they got behind in January. Inventories rose 0.3 percent in the month which isn’t alarming in itself but relative to sales, which fell 1.3 percent, inventories look heavy. The stock-to-sales ratio rose two notches to 1.35 from 1.33 for the highest reading of the recovery, since April 2009.

Industries where inventories rose relative to sales include furniture, farm products, computers, and autos. Very few industries at the wholesale level show leaner levels in the month.

Year-on-year, wholesale inventories are up 2.0 percent against a 3.1 percent decline for sales. Increases for inventories are a positive for GDP calculations but not for the production or employment outlooks nor for business confidence. Heavy inventories were a question during the fourth quarter and may be becoming one for the first quarter as well.

Wholesale trade

WARREN MOSLER
Warren Mosler is an American economist and theorist, and one of the leading voices in the field of Modern Monetary Theory (MMT). Presently, Warren resides on St. Croix, in the US Virgin Islands, where he owns and operates Valance Co., Inc.

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