by Bill McBride on 9/10/2010 10:07:00 AM
Friday, September 10, 2010
From the Census Bureau:
Total inventories of merchant wholesalers, except manufacturers’ sales branches and offices, after adjustment for seasonal variations but not for price changes, were $405.0 billion at the end of July, up 1.3 percent ...Click on graph for larger image in new window.
The July inventories/sales ratio for merchant wholesalers, except manufacturers’ sales branches and offices, based on seasonally adjusted data, was 1.16.
Usually we focus on Manufacturers' Inventories and Manufacturers' inventory-to-sales ratio, but the wholesale inventory report shows the same thing - the inventory adjustment is over.
This increase could be spun two ways. First from CNBC:
U.S. wholesale inventories surged by the largest amount in two years in July ... in a sign firms were anticipating enough demand to boost stock this summer.That sounds like good news.
The alternative view (my view) is that inventories are now a little too high - and that wholesalers will now cut back a little on orders.
Posted by Bill McBride on 9/10/2010 10:07:00 AM