There Goes Q2 GDP - Wholesale Inventories Miss By Most In 16 Months

Tyler Durden's picture

Against expectations of a further rise in inventory build of 0.7%, wholesale inventories rose only 0.3% in June (the same pace as in May) missing by the most since February 2013. With GDP now basically an exercise in inventory expansion and contraction (Q2 inventory estimate amounte to 40% of GDP), this 'miss' offers little hope for the initial Q2 rebound to hold its exuberance. In addition, wholesale sales also missed (up only 0.2% against expectations of a 0.7% rise) with growth slowing for the 3rd month in a row.

Inventories miss significantly...


And sales slow dramatically...


and here's why Q2 GDP estimates will we note before...

The result is that of the $675 billion rise in nominal GDP in the past year, a whopping 52%, or over half, is due to nothing else but inventory hoarding.

Once again, enjoy the sugar high that inventory accumulation always generates in the current quarter. Just don't expect it to last.


Charts: Bloomberg

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ekm1's picture



How many times was the inventory counted into GDP:







Atomizer's picture

Changing math models to report positive outcomes is the new normal. 

Chris Jusset's picture

It would be simpler if the US just admitted that it never left the 2009 Depression, and that all economic activity since 2009 has been both (1) bubble-blowing; and (2) data-fudging.

venturen's picture

that is the liberals multiplier effect

Eyeroller's picture

Whew!  For a minute there I thought those Q2 numbers were REAL, which meant the Ponzi Munchkin would raise rates sooner. 


NoDebt's picture

I believed them.  Now I'm sitting here with my head in my hands sobbing uncontrollably.  

4%!  They PROMISED me 4%!  They said it was real, but they lied!  Why would they do that to me?

SillySalesmanQuestion's picture

Ooooops, the wrong button got pushed again...where's that damn plus sign?

Bill of Rights's picture

EXK is on fire traders...looking for 7.50 earnings on the 11th

kito's picture

man you are watching the horses run well after the barn door has been closed. you shouldve been in 40% ago...


btw fonz has been talking about exk for a month........shout out to fonz........

Bill of Rights's picture

No kidding huh? I've owned EXK since 2011...feel free to ask next time.

youngman's picture

What this means is that that 4% GDP number just took a hit..but hey..its all about the headline and the soundbite speech....political numbers...just wait until we get closer to the elections..these numbers will go balistic

ArkansasAngie's picture

I've got a $100 bet with my son that GDP settles sub 2.  Not paying till the third revision and don't expect to then.  McDonalds here I come.

Youngins are so niave.

RiskyBidness's picture

The Sham is getting close to being over.  Bullish short term!!  The top was already made.  I will sell all rips to the 21 sma.

Grande Tetons's picture

The top was already made.

Only certain if you are baking muffins. 

Edit. Junkers...after 5 plus year of this shit....we are calling a top? 

buzzsaw99's picture

merry effing xmas ho ho ho

pods's picture

That is hilarious.  Now there are two gold shirt guys?  

"He says he gets both admiring looks from women and envious looks from men."

That is a guy who has ZERO skills.  He mght be mistaking pity for envy?

So, what should I do with all my gold?  Hmmmm, lets make it into a shirt so it smells just like me.  That outta get the women riled up.

(Can anyone guess how good a 4 kg shirt smells in Delhi?)

BTW sdm, you are still using Mrs. pods pic without permission.


sdmjake's picture

If that is MrsPods you need to immediately 1) log off the computer and 2) X X X

JustObserving's picture

Who cares about inventories?  All US growth has been manufactured by lowering the inflation rate.

Real US inflation has been 3% to 6% higher than official inflation for decades now.  So real US GDP is under 50% of official GDP. 

The games will continue - ignorance is bliss.  And a false reality is even more bliss.

As I have emphasized for years, the West already lives in the dystopia forecast by George Orwell. Jobs are created by hypothetical add-ons to the reported payroll figures and by inappropriate use of seasonal adjustments. Inflation is erased by substituting lower priced items in the inflation index for those that rise in price and by redefining rising prices as quality improvements. Real GDP growth is magicked into existence by deflating nominal GDP with the understated measure of inflation

Smegley Wanxalot's picture

So 4% will end up at 2.5% or so after the Inv and Wholesale misses.  Net that with the negative 2.9% in Q1 and we are down on the year.  But no worries ... the estimates for Q3 and Q4 are kick ass!

NoDebt's picture

Q3 and 4 are the only quarters you can trust.  1 & 2.... they're fudged.  But 3 & 4 are the real deal.

I am praying to the Hocky Stick God right now.

Smegley Wanxalot's picture

I agree. 3 & 4 are as good as gold, but 5 & 6 will be the make or break quarters, so smart money is buying now while everything's still cheap.

Atomizer's picture

The subliminal message, Buy Moar Stawks so we can transfer wealth by amendment. 

kw2012's picture

Steve Liesman is the Wasserman Shultz of CNBC.

NoDebt's picture

He's the Ted Baxter of CNBC.

Senior economics reporter.... with no degree in enconomics.  Not even a bachelor's.  Only "Journalism".

KnuckleDragger-X's picture

With a journalism degree you'e learned nothing but know everything, after all, those people at the cocktail parties couldn't possibly be wrong.

Rathmullan's picture

Fully expect 4th Q RGDP to come in around 1.5%. Given that and an end to QE and imminent or rising interest rates should make for a long, cold winter 2015.

JRobby's picture

Don't build it because they ain't comin'

Dre4dwolf's picture

Look at the bright side when they have to write down all this inventory just to stay solvent, there will be tons of sales "50% off, 75% off 90% off". "going out of business free stuff".



orangegeek's picture

what do you think yellen?


still want to print more?


caused enough damage yet or would you like to cause more?



Casserole of nonsense's picture

Using a negative 3% inflation adjustment will fix this issue lickety split.

CoastalCowboy's picture

May I be the first state that this is obviously a racist conspiracy to even mention such negativity.

On the other hand, I've noticed some of clients are having issues with getting their receivables paid in a timely fashion. Anecdotal story, of course, whereas prior they have not been having these issues to this degree.