Posted on 09/14/2010 7:18:13 AM PDT by blam
Business Inventories Rise By More Than Expected
Vincent Fernando, CFA
Sep. 14, 2010, 10:02 AM
Business inventories for July rose 1% vs. 0.7% expected.
Developing...
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Sales. The U.S. Census Bureau announced today that the combined value of distributive trade sales and manufacturers’ shipments for July, adjusted for seasonal and trading-day differences but not for price changes, was estimated at $1,090.0 billion, up 0.7 percent (±0.2%) from June 2010, and up 9.2 percent (±0.5%) from July 2009.
Inventories. Manufacturers’ and trade inventories, adjusted for seasonal variations but not for price changes, were estimated at an end-of-month level of $1,375.7 billion, up 1.0 percent (±0.1%) from June 2010 and up 2.4 percent (±0.4%) from July 2009. Inventories/Sales Ratio. The total business inventories/sales ratio based on seasonally adjusted data at the end of July was 1.26. The July 2009 ratio was 1.35.
See the full release here.
[snip]
(Excerpt) Read more at businessinsider.com ...
Is that increased production or reduced sales? Consumer sentiment is not rising. Consumer debt is not growing, it’s contracting. Deflation is hanging around like a big hungry buzzard.
Rising business inventories means slowing or negative economic growth.
Inventory up = sales down.
Inventory up tends to lead to lower production and lower employment.
Inventory up = cash flow down and investment down.
I didn’t click out and read the rest of the article, but I doubt that it elaborated on the reasons that “business inventories up” is BAD economic news.
Actually inventory up can be distilled down to something even simpler:
Inventory up = bad forecasting
Inventory inflation?
“[July] Personal consumption expenditures rose 0.4%, month over month which was slightly ahead of the consensus estimate. Stripping out price increases, however, “real” personal expenditures were up just 0.2%.”
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