The news on the second quarter continues to darken as business inventories fell 0.2 percent in April which is 1 tenth below Econoday’s consensus. Inventories at retailers also fell 0.2 percent with wholesale inventories down a very sharp 0.5 percent. Factory inventories were positive but only barely, at 0.1 percent. Declining inventories are a possible signal of business caution and a certain negative for second-quarter GDP.
Why Shouldn’t Inventories Sink?
Retail sales in May declined 0.3 percent. Weakness was across the board. So, why should businesses be cautious about inventories?
For further discussion of retail sales, please see Retail Sales Dive (And It’s Not Just Autos)
Second Quarter Reality
- Business Inventories Sink (And Why Shouldn’t They?)
- Retail Sales Dive (And It’s Not Just Autos)
- Wholesale Trade Report Worse Than Expected: 2nd Quarter Recovery Thesis Nearly Dead
- Factory Orders a 2nd Quarter Disappointment: “High-Flying” Regional Nonsense
- Payrolls “Unexpectedly” Weak, Negative Revisions, Earning Poor: What Happened?
- Trade Deficit Widens: Cascade of Bad News Accelerates, Trump Will Howl
- Construction Spedding: Construction Spending Falls Sharply, March Revised Higher: Construction Spending Mysteries
- Motor Vehicle Sales: Motor Vehicle Sales Flat, Hope Turns to Second Half: What About Fleet Sales? Incentives?
- April Durable Goods shipments down 0.3%, new orders down 0.7%: April Durable Goods: Yet Another Weak Second-Quarter Report
- Wholesale Inventories: Down 0.3% in April. March revised lower from 0.2% to 0.1%.Retail Inventories: Down 0.3% in April. March revised lower from 0.5% to 0.3%. For details, please see Fed Eyes Second Quarter Recovery, Expects Trump Fiscal Policy Will Expand Economy
- Trade deficit in April widens by 3.8% with exports down and imports up: Trade Deficit Widens, Exports Weak: Economists Miss the Mark
- Tax Receipts: Federal Tax Receipts Running Below Expectations
- April New Home Sales: New Home Sales Contract 11.4%: Sales Barely Up Year-Over-Year
- April Existing Home Sales: New Home Sales Contract 11.4%: Sales Barely Up Year-Over-Year
- April Existing Home Sales: Spring Housing Flop: Existing Home Sales Decline 2.3 Percent, Inventory Issues Persist
- April Housing Starts: About that Strong April Recovery: Housing Starts and Permits Flop, March Revised Lower
- April Empire State Manufacturing Survey: Empire State Manufacturing Survey Turns Negative: Welcome News?
- April Retail Sales: Sales were at least positive (+0.4%), but they were well under economists projections: Retail Sales Disappoint Again: Department Stores Clobbered in 2017
Yellen Still Clueless?
Retail sales aside, jobs, aside, all miserable data aside, the Fed will hike today.
Ignoring my typo of “id” instead of “is” here is the question of the day.
Repeating my warning issued twice before, last on June 10.
Mike “Mish” Shedlock