GDP estimates for fourth quarter will undoubtedly decline after today’s series of miserable economic reports.
Icing on the miserable cake comes from the commerce department report on Manufacturing and Trade Inventories and Sales for November 2015. Both sales and inventories declined.
Sales
Down 0.2 percent from October 2015
Down 2.8 percent from November 2014
Inventories
Down 0.2 percent from October 2015
Up 1.6 percent from November 2014.
Inventories/Sales Ratio
The total business inventories/sales ratio based on seasonally adjusted data at the end of November was 1.38. The November 2014 ratio was 1.32.
Synopsis
Inventories are up 1.6% from a year ago. Sales are down 2.8% from a year ago.
That inventory build was unwarranted, and no doubt inspired by a lot of cheerleading by the Fed about the strength of the US economy.
So here we are once again with another recessionary looking inventory-to-sales ratio. The chart reflects November.
Earlier today we learned December Retail Sales were Negative.
Expect another bad looking chart next month.
Mike “Mish” Shedlock
