{"id":10446,"date":"2010-08-10T13:28:47","date_gmt":"2010-08-10T17:28:47","guid":{"rendered":"http:\/\/www.thedisciplinedinvestor.com\/blog\/?p=10446"},"modified":"2016-09-20T07:38:22","modified_gmt":"2016-09-20T11:38:22","slug":"wholesale-inventories-the-start-of-the-economic-turn","status":"publish","type":"post","link":"https:\/\/thedisciplinedinvestor.com\/blog\/2010\/08\/10\/wholesale-inventories-the-start-of-the-economic-turn\/","title":{"rendered":"Wholesale Inventories – The Start of The Economic Turn?"},"content":{"rendered":"

While it is a good to see that wholesale inventories are dropping, it is not for the right reasons. What an economy looks for is a combination of manufacturing and sales. If sales are high, there is the potential to see a strain on inventories and reports to show a drop at the business and wholesale levels.<\/p>\n

But, if sales are lackluster, there should be a rising level. Yet, in this case, sales are low and inventories are going lower as well, signifying that retailers and businesses are not replenishing stock. The reason? There is a slowdown occurring and no one wants to get caught again holding the bag.<\/p>\n

\"\"<\/a><\/p>\n

The last time inventories rose when sales were soft provided for a terrible result. Prices were slashed and retailers entered into a time of panic. That was the beginning of the consumer shutdown that hobbled businesses worldwide. Now it could be signaling a similar situation that is the beginning of the end in the inventory restocking cycle that has boosted the word’s manufacturing capacity over the past 18 months.<\/p>\n

From Briefing.com<\/strong><\/a>:<\/p>\n

Wholesale Inventories Grow as Sales Tumble<\/strong><\/p>\n

Merchant wholesale inventories increased 0.1% in June, down from 0.5% growth in May. The Briefing.com consensus forecast called for wholesaler inventories to increase 0.4%.<\/p>\n

Much of the data were already estimated in the Q2 GDP report.<\/p>\n

The lack of inventory growth is a little disconcerting when coupled with the 0.7% decline in May’s wholesale sales. Wholesalers have stopped purchasing new inventories and the upward trend is only developing because sales are weakening.<\/p>\n

The lack of inventory growth may signal that wholesalers anticipate further reductions in demand over the coming months. The details of the data confirm this.<\/p>\n

Just about every sector that saw negative sales growth also saw positive inventory gains. Likewise, most sectors that reported strong sales also reported inventory losses.<\/p><\/blockquote>\n","protected":false},"excerpt":{"rendered":"

While it is a good to see that wholesale inventories are dropping, it is not for the right reasons. What an economy looks for is a combination of manufacturing and sales. If sales are high, there is the potential to see a strain on inventories and reports to show a drop at the business and […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[5,12],"tags":[481,483],"class_list":["post-10446","post","type-post","status-publish","format-standard","hentry","category-economy","category-markets","tag-economy","tag-markets","et-doesnt-have-format-content","et_post_format-et-post-format-standard"],"acf":[],"_links":{"self":[{"href":"https:\/\/thedisciplinedinvestor.com\/blog\/wp-json\/wp\/v2\/posts\/10446","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/thedisciplinedinvestor.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/thedisciplinedinvestor.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/thedisciplinedinvestor.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/thedisciplinedinvestor.com\/blog\/wp-json\/wp\/v2\/comments?post=10446"}],"version-history":[{"count":0,"href":"https:\/\/thedisciplinedinvestor.com\/blog\/wp-json\/wp\/v2\/posts\/10446\/revisions"}],"wp:attachment":[{"href":"https:\/\/thedisciplinedinvestor.com\/blog\/wp-json\/wp\/v2\/media?parent=10446"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/thedisciplinedinvestor.com\/blog\/wp-json\/wp\/v2\/categories?post=10446"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/thedisciplinedinvestor.com\/blog\/wp-json\/wp\/v2\/tags?post=10446"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}