Posted on 07/11/2015 10:38:50 AM PDT by Kaslin
Martin Crutsinger has been a business and economics writer at the Associated Press for over three decades. Certain people in high places apparently hold him in high regard. In early 2014, on his 30th anniversary with the wire service, he is said to have received congratulatory letters from soon-to-be Federal Reserve chair Janet Yellen, soon-to-be-former chair Ben Bernanke and Obama administration Treasury Secretary Jack Lew, which he clearly enjoyed as those in attendance munched on a very delicious-looking cake.
We can't know whether the congrats from those heavy hitters merely marked a career milestone, or if they included an element of "Thanks for toeing the line all these years." What I do know is that the dispatch Crutsinger wrote Friday morning on the government's gruesome May wholesale trade report contains errors and instances of ignorance which really do take the cake.
Crutsinger's busts are so blatant and obvious that I decided to wait until late Friday evening to see if he or anyone else at the AP would fix them.
The primary takeway in the AP reporter's narrative is supposed to be his claim that "The strong increase in inventory building in May could be evidence that businesses are growing more confident about the future." That's almost definitely rubbish. Crutsinger's errors conveniently make his "analysis" look credible.
There was an increase in seasonally adjusted inventories. But I will show, based on the first seven paragraphs of Crutsinger's missive — presented as a graphic in case the wire service finally recognizes its errors — that in one key instance, when he thought he was commenting on "inventories," he was really referring to "sales." This confusion or ignorance caused him to seriously mislead his readers.
Here are those first seven paragraphs:
The five items underlined in red represent the five chances the AP and Crutsinger had to describe the inventory increase as seasonally adjusted. While it's understandable that such a description wouldn't be in the headline, it's inexcusable that it didn't show up until the fourth paragraph (underlined in green). That's because, before seasonal adjustment (i.e., in reality), inventories declined:
The fact is that wholesalers didn't "boost their stockpiles" in May; there wasn't a "strong increase in inventory building"; and they didn't "decide to accelerate inventory stocking." Wholesalers instead reduced their inventories by less than they have in most previous years, which explains why the seasonally adjusted result turned out to be an increase. There's nothing underhanded in that conversion (we'll see a different conversion which is quite suspect a bit later), but readers should have learned that the reported increase was seasonally adjusted well before Paragraph 4.
Now we can get to the really serious busts in Crutsinger's work.
Astute readers may already be wondering why the AP reporter's $449.8 billion in his fourth paragraph doesn't agree with the inventory figures seen above. That's because ... (I can't believe I'm typing this) ... the $449.8 billion figure and the 3.8 percent decline are for sales and not inventories. Oh, and the cited percentage reduction of 3.8 percent in sales just scratches the surface. Monthly wholesale sales have been lower than the same month in 2014 all year long, and the drops have been getting progessively steeper:
We have 3 new WalMart stores in my area. One is a replacement store for smaller store that was closed. (not much smaller)
2 others are “community” stores. Like convenience store WalMarts.
The larger store (replacement) has been open for 6 months and still have consistent holes in inventory. They are choking the purchasing side. I suspect vendors that “gave” them the inventory are probably getting more of the cash flow in orders. All 3 stores are paper thin on inventory. All 3 are slow to replenish. Not the normal pattern for them.
Supports the authors premise that retail business is pretty rotten.
My wife has been with Walmart for over 15 years now. Their issue is not getting merchandise. It is instead getting it on the shelves. They have had to cut their floor and backroom associates so much to show a profit that they do not have enough people to keep the shelves filled. The backrooms are loaded and just about every Walmart has trailers out back filled with merchandise. More merchandise than they can work.
I’ve been thinking it is deliberate.
The Walmart Supercenter I shop at keeps a thin inventory on the shelves which makes it necessary for me to keep a “safety stock” of items at home. Rather than chance finding what I usually buy being not available on a given shopping day, I keep a two or three week supply on my cabinet shelves. It’s smart of them to do that.
However, the risk they run, and what has led me to get my OTC pharma on a subscription basis (for less money, too) from Amazon.com, is that people may switch to more reliable suppliers over time.
Go there after 2200 hrs, The isles are packed with pallets of goods.
Both points acknowledged.
Persistent holes of same product for months is not attributable to those.
We have three Super Wal-Mart stores here in my town, one only a couple of miles from my house. Plus another on in KY just a little of 6 miles from my house. Then they are building 3 or 4 neighborhood Wal-Mart grocery stores here also, and one is not far from Kroger
“neighborhood Wal-Mart grocery stores”
Mentioned the 2 near, one 10-miles away other 18-miles away. The one 10 miles away is getting kicked in the teeth by a strong independent locally owned grocery store.
Stated that wrong.
The one 18 miles away is the Super WalMart.
The 2nd Neighborhood grocery store is about 35 miles away.
The closest Wal-mart Supercenter from my house is 1.6 miles, the next closest is actually in KY past Fort Campbell,KY at 6.1 miles but is smaller than the one that is closest to me. The 3rd closest one here in Clarksville is 9.6 miles and the farthest one is 13.8 miles
Vendors may be standing up to Wal-Mart payables policy. Better to sell through Amazon, you don’t wait 120 days for your money.
One of may vendor issues with WalMart.
Totally different company from what Sam Walton created.
I’ve known a couple of people that worked for him before he went public.
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