The release of wholesale sales for September showed very little change in the stretching condition of sales against inventory. Overall, sales declined year-over-year for the ninth consecutive month and ten out of the last eleven. At -3.6% in October, that compares to yet another gain in inventory, this time +4.5%. That leaves the 6-month average for inventory at +4.6% which [...]
What is taking place on the wholesale level of the supply chain is simply unprecedented. Admittedly, the current iteration of the wholesale data series only dates back to 1992, so there is some possibility of a similar disparity at some point in actual economic history. However, at present, inventory continues onward with only a slight deviation and slowing recently while [...]
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 [...]
After nearly coming in flat for June, wholesale sales fell almost 5% year-over-year in July. That is the second worst month of this “cycle”, bested only by May’s nearly 7% drop. The six-month average is now -3.2% which is uncomfortably close to the worst part of the dot-com recession which only averaged -4.0% at the low. Despite that sales environment, [...]
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 [...]
May must have been the month of sevens. First, exports declined by 7% year-over-year, as did imports. Now the Commerce Department reports wholesale sales within the US fell by 6.8%, which is good enough in close rounding to be yet another seven percent contraction. In the case of wholesale sales, while those estimates are likely coincidence at all around -7%, [...]
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 [...]
This is one of those months where you wonder what the seasonal adjustments are doing. Wholesale sales ended their three-quarter year contraction streak by rising in April, but only in the adjusted series. Because sales moved up faster than inventories there, the inventory-to-sales ratios declined somewhat off their dramatic March peak. While that sounds great, the level of wholesale sales [...]
The problem with the employment report is not just about how it is calculated but more so that it is taken as the definitive measure of economic performance. The notion itself, conceptually at least, isn’t assaultive as the modern economy is entirely about the division of labor and specialization, so anything that deals in that subject matter is already in [...]
For the most part, retailers have been far more cautious about inventory than their wholesale counterparts. I don’t doubt that those two processes are actually related, with the inventory appetite swinging to wholesalers almost by default, but circumstances now dictate either a conscious break with that conduct or a convergence. With inventories already far too deep on the wholesale level, [...]
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