by John Galt
November 8, 2009
Separately, the Commerce Department released its report on wholesale inventories in the month of September, showing that inventories fell by a little less than economists had been anticipating. The report also showed a continued increase in wholesale sales.
Let’s parse this news and add some graphs.
Despite the seasonal bump, which is just wholesalers attempting to clear their inventories for Christmas, the levels we are at are still below the September 2007 levels, considered the last pre-recession Christmas retail season with any hint of normalcy. The lack of wholesale sales is further emphasized by the continuing decline in durable goods which are at abysmal levels, no matter how you cut it.
The sesaonal uptick will soon end if the pattern of the past two years validates and by the end of this year, we should be below 2007 levels across the board. Unless we see a dramatic turnaround in the next two months, the level of CRE failures due to a retail and manufacturing implosion will horrify more people than give them hope and change.
The decline in wholesale inventories, despite the positive spin, is not a positive as we are in the teeth of the Christmas season and the two year plus chart reflects that fact:
The fact that the Bubblemedia spins this as a positive, reality is that retailers see no great visit from St. Nick and thus are terrified to get trapped like they did last year. The raw numbers tell the tale and until you see the wholesale inventories start to increase, small and large businesses are voting with their brains by indicating they do not trust the administration nor future actions of the banksters. There is no inventory build because no one can find cheap capital to start a new business, expand an existing one, or gamble that a large inventory order will be a profitable proposition for the future. That should give everyone a clue as to our future and I will follow up this series with another one on December 10th or 11th when the new data is released.
For those that care, by the way, one little important fact:
These are NON-SEASONALLY ADJUSTED numbers or the raw real deal. No fantasyland or politically influenced figures for the purposes of measuring where we really are at.