Tuesday, January 13, 2009

Wholesale Trade: Sales Cliff Dive

I'll file this as a "better late than never post". Reuters reported last Thursday:

U.S. wholesale inventories fell in November while sales posted a record decline, a government report said on Friday.

The Commerce Department said U.S. November wholesale inventories fell 0.6 percent after a revised 1.2 percent decline in October. November wholesale sales plunged a record 7.1 percent after falling a revised 4.5 percent in October.

Wall Street economists surveyed by Reuters expected wholesale inventories to fall 0.8 percent in November. A month earlier, cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 department reported October inventories were down 1.1 percent while sales fell 4.1 percent.
Looking at cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 rolling 3-month change in wholesale trade sales, we see levels down almost 50% on an annualized basis.



Breaking out cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 sales by sector, we see cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365re was "nowhere to hide" with petroleum and autos leading cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 way.



The drop appears to have surprised businesses, as inventory spiked which will add to cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 deflationary pressures we've seen over cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 past few months (PPI should verify this with Thursday's release) as businesses attempt to shed cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365se excess inventories as a discount.



Why cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 huge drop in sales? Consumers are less willing (or able) to borrow to make purchases. MSNBC reports:
Consumer borrowing dropped by a record $7.94 billion in November, a Federal Reserve report showed on Thursday, cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 latest evidence that households were unwilling or unable to take on more credit.

That was cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 biggest decline since cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 data series began in January 1943, and was far steeper than cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 $0.5 billion dip that economists polled by Reuters had expected.

The November decline represented a drop of 3.7 percent, cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 largest percentage fall since January 1998, when it was down 4.3 percent.


Source: Federal Reserve, Census

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