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Tag Archives: inventory cycle

US Sales and Production Remain Virus-Free, But Still Aren’t Headwind-Free

The lull in US consumer spending on goods has reached a fifth month. The annual comparisons aren’t good, yet they somewhat mask the more recent problems appearing in the figures. According to the Census Bureau, total retail sales in January rose 4.58% year-over-year (unadjusted). Not a good number, but better, seemingly, than early on in 2019 when the series was putting out 3s and 2s. As has been the pattern in these things, global synchronized downturns, the middle part of last year sets up...

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The Inventory Context For Rate Cuts And Their Real Nature/Purpose

What typically distinguishes recessions from downturns is the inventory cycle. Even in 2008, that was the basis for the Great “Recession.” It was distinguished most prominently by the financial conditions and global-reaching panic, true, but the effects of the monetary crash registered heaviest in the various parts of that inventory process. An economy for whatever reasons slows down. That leads to inventory piling up across the various levels of the supply chain. Most businesses will remain...

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US Industrial Downturn: What If Oil and Inventory Join It?

Revised estimates from the Federal Reserve are beginning to suggest another area for concern in the US economy. There hadn’t really been all that much supply side capex activity taking place to begin with. Despite the idea of an economic boom in 2017, businesses across the whole economy just hadn’t been building like there was one nor in anticipation of one. The only place where there was a truly robust trend was the oil patch. Since the last crash a few years ago, Euro$ #3, the oil sector...

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GDP (and Revisions) Confirms The Curves

Real Gross Domestic Product expanded by 2.54% in Q2 2017, below most estimates including the final one from the Atlanta Fed’s GDPNow model. That latter method was close once again in its final days (+2.8%), but earlier in the quarter was predicting GDP growth of 4.3%. That would have been like what many people were thinking after another awful first quarter, a meaningful rebound in the second that would give “reflation” a statistical boost suggesting at last some real economy action behind...

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