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Tag Archives: Inventory

Briefing Even More Inventory

Retail sales stumbled in December, contributing some to the explosion in inventory across the US supply chain – but not all. Inventories were going to spike even if sales had been better. In fact, retail inventories rose at such a record pace beyond anything seen before, had sales been far improved the monthly increase in inventories still would’ve unlike anything in the data series. And now those inventories have been revised upward. While so, the more...

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FOMC Goes With Unemployment Rate While This Huge Number Happens To Far More Relevant Economic Data

The first time I can consciously remember using the term landmine was probably here in February 2019. I had described the same process play out several times before, I had just never applied that term. There was all sorts of market chaos in the final two months of 2018, including a full-on stock market correction, believe it or not, leaving the inflation and recovery narrative in near complete tatters. All that was missing by then was the economic data to confirm...

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GDP Red Flag

There were no surprises in today’s US GDP data. As expected, output sharply decelerated, modestly missing much-reduced expectations. The continuously compounded annual rate of change for Q3 2021 compared to Q2 was the tiniest bit less than 2% (1.99591%) given most recent expectations had been closer to 3%. It was only two months ago, mid-August, when the Blue Chip consensus pegged quarterly growth at better than 7%. Such a fast drop-off immediately brings up delta...

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What *Seems* Inflation Now Is Something Else Entirely

This is yet another one of those crucial recent developments which should contribute much clarity about the economic situation, yet is exploited in other ways (political) adding only more to the general state of economic confusion. The shelves may be empty in a lot of places around the country, leaving anyone with the impression there just aren’t enough goods. Shortage of goods, everyone’s thinking, by virtue of economics (small “e”) it will be another significant...

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More About Less New Orders

The inventory saga, planetary in its reach. As you’ve heard, American demand for goods supercharged by the federal government’s helicopter combined with a much more limited capacity to rebound in the logistics of the goods economy left a nightmare for supply chains. As we’ve been writing lately, a highly unusual maybe unprecedented inventory cycle resulted (creating “inflation”). The worse the shipping snafus, the more was ordered and piled into it – if for no...

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An Economy Dividing By Inventory And Labor

Is it delta COVID? Or the widely reported labor shortage? Something has created a soft patch in the presumed indestructible US economy still hopped up on Uncle Sam’s deposits made earlier in the year. And yet, there’s a nagging feeling over how this time, like all previous times, just might be too good to be true, too. To start with, the rebound from last year’s recession is decidedly, maybe even uniquely uneven. Not just explosive goods sector vs. moribund...

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All Eyes On Inventory

You’ve heard of the virtuous circle in the economy. Risk taking leads to spending/investment/hiring, which then leads to more spending/investment/hiring. Recovery, in other words. In the old days of the 20th century, quite a lot of the circle was rounded out by the inventory cycle. Both recession and recovery would depend upon how much additional product floated up and down the supply chain. Deflation, too. On the contraction side, demand might fall off a bit for...

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A Real Example Of Price Imbalance

It’s not just the trade data from individual countries. Take the WTO’s estimates which are derived from exports and imports going into or out of nearly all of them. These figures show that for all that recovery glory being printed up out of Uncle Sam’s checkbook, the American West Coast might be the only place where we can find anything resembling Warren Buffett’s red-hot claim. That’s a problem, and much bigger one that may otherwise appear especially given current...

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Yep, There’s A New ‘V’ In Town And The Locals…Don’t Seem To Much Care For It

They should be drooling over the prospects of a clearing path toward normality. The pain and disaster of 2020’s economic hole receding into a more pleasant 2021 which would have been in position to conceivably pay it all back before any long run damage. Getting back to just even with February instead is becoming a distant probability, the kind of non-transitory shortfall with which we’ve grown far too accustomed. Therefore, “they” now salivate (reported to be...

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The Smallness of the Most Gigantic

These numbers do seem epic, don’t they? It’s hard to ignore when you have the greatest percentage increase in the history of a major economic account. Just writing that sentence it’s difficult to deny the power of those words. Which is precisely the point: we already know ahead of time how the biggest economic holes in history are going to produce the biggest positives coming out of them. Whether that constitutes an actual recovery as opposed to the simplistic and...

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