Wholesale Inventories Below CONsensus Even As UMich CONtinues Trying To CONvince CONfidence Surging
The ephemeral inventory-based GDP bounce story just keeps getting getting delayed over and over: after an expectation of a 1% decline, the number came in at a disappointing to the green shootists -1.4%:
Total inventories of merchant wholesalers, except manufacturers’ sales branches and offices, after adjustment for seasonal variations but not for price changes, were $387.2 billion at the end of July, down 1.4 percent (+/-0.4%) from the revised June level and were down 12.8 percent (+/-1.1%) from a year ago. The June preliminary estimate was revised downward $1.4 billion or 0.4 percent. End-of-month inventories of durable goods were down 1.5 percent (+/-0.4%) from last month and were down 13.0 percent (+/-1.2%) from last July. Inventories of metals and minerals, except petroleum, were down 4.4 percent from last month and inventories of furniture and home furnishings were down 2.7 percent. End-of-month inventories of nondurable goods were down 1.0 (+/-0.4%) from June and were down 12.4 percent (+/-1.4%) compared to last July. Inventories of farm product raw materials were down 5.1 percent from last month and inventories of beer, wine, and distilled alcoholic beverages were down 2.8 percent.
The destocking in alcohol beverages strikes us as not very surprising.
The only ray of sunshine was a slight improvement in the Inventory/Sales ratio which declined slightly from 1.25x to 1.23x.
The full release by the Census Bureau can be found here.
In other news, surprisingly ignored by the headline-only reading momo crowd, the CONsumer CONfidence number from Reuters/UMich, which apparently has decided to delete all non Wall-Street terminating numbers from its survey rolodex, has surged to a preliminary September read of 70.2 from 65.7 in August. Contrast this number with the weekly ABC Consumer Confidence Index which is stuck at a post-Lehman low, and derive your own conclusions.
"Confidence rebounded in early September as consumers increasingly
expected the economy to improve despite their reluctant conclusion that
their own financial situation would remain quite problematic for some
time," the Reuters/University of Michigan Surveys of Consumers said in
Reluctant conclusion indeed, sparked by an ongoing freeze in consumer lending and a surging savings rate. But at least the talking heads tell the optimistic/pessimistic consumer all is good.