Wholesale Sales Tumble Most Since January, Inventories Ratio Deep In Recessionary Territory

Tyler Durden's picture

Wholesales sales slumped 0.4% MoM in July - the biggest drop since January. Inventories were unchanged MoM, driving the inventories-to-sales ratio back up to 1.34x. Year-over-year, this was the 19th consecutive month of declines for wholesale sales...

Notably Auto sales dropped for the 3rd month in a row but Hardware saw the biggest monthly drop in sales.

Farm products saw the biggest drop in inventories along with drugs. Auto inventories rose but professional equipment rose the most.

The absoluet gap between sales and inventories remeains near record highs...


But the sales drop and inventiories flat has led to a rise in the inventories-to-sales ratio, which remains deep in recessionary territory...


Probably a good time to hike rates?

Charts: Bloomberg

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
brada1013567's picture

Wait bad news is bad news, that doesn't sound right.

roxyNL's picture

If trump wins the election, the ((( money cartel))) will crash the market with a rate hike.

then they will blame it on him

CJgipper's picture

Actually, they'll blame conservatism and liberty in general.  Why limit such a wide sweeping victory to just one man when it can be used to crush opposition for generations.

tarsubil's picture

This is different, right? The last time we saw a spike in inventories to sales was when a great fraud imploded the credit market. The credit cycle might be rolling over but it certainly hasn't hit the wall yet and we already have a high ratio.

I'm not even sure what to make of this. Perhaps the fraud is now baked in. Perhaps we will get some truly extreme deflation when the credit cycle finally hits the wall. Who the fuck knows anymore.

Burticus's picture

You can see on the charts that during the 2008 fraudcession, the inventory/sales ratio spiked up and back down quickly. 

This time, you see a steady grinding increase in the ratio over years, as central banking and crony governmentalized economies implode into a financial black hole singularity of NIRP.

The Duke of New York A No.1's picture

The odds that the FED/Wall Street are going to gamble with a rate hike in Sept. and potentially crash the market less than 60 days b4 the election are not very high IMO ... about as likely as Hillary admitting she has health problems.

brada1013567's picture

Yes, but they needed to sell that story before OPEX

buzzsaw99's picture

i know an auto dealer that has 157 versions of the 2016 model i want. i wonder if they can hold out longer on price than i can. somehow i doubt it.

InflammatoryResponse's picture

Really? the lot is loaded up that much? 


I see lot of full auto lots around me.  I drive past several going to/from work every day.


buzzsaw99's picture

you wouldn't even believe it. behind some of the dealers' front lots there are rows and rows and rows of the same (popular) models that haven't even been washed once. different makes, but the high volume lots are choking on inventory and overflowing out the back. the smart ones are the ones who read the writing on the wall and have very limited inventory but use other dealer inventory as their own. never walk onto the front of a lot, sneak up behind and see if you don't notice the same thing.

JMT's picture

where exactly??  In the NYC area and eastern Massachusetts car dealers are forecast to have the best year on record after record sales in 2015. many popular models are on at least a wait of 1 - 2 months and many models are selling for at least 10% over full MSRP.   Don't forget sales tax & registration fees (in NYC sales tax is 8.875%, Massachusetts 6.25%, in Connecticut 6% plus confiscatory registration fees -- of course all these fees & taxes are just "bundled" in to the loan.. Millenials are fine with either leasing a BMW for $399 a month or a 72 month loan at 0% with 0 down for an Acura or new loaded Honda Accord (of course usually mommy & daddy are paying)

buzzsaw99's picture

some of the overflow is even on dirt lots. here is a map of some of it:


JMT's picture

Dealers cannot keep popular models in stock. The Ford F 150 is selling for at least 10% over full MSRP, same with the BMW 328i. "millenials" now prefer to own a car rather than take public transporation especially when it is 20degrees out from December - March. Of course mommy & daddy are paying.  Even in the suburbs everyone has a $50,000 SUV and /or a BMW 3 or 5 series (new of course)

buzzsaw99's picture

in that case it would be worth it for them to fly to the middle of the country. i am in oklahoma. $2500 - $5000 off msrp is common with many incentives. I know one lot with 66 2016 Honda CR-Vs sitting. Same with RAV4, F-150, etc., etc..

as far as people on the east coast being loaded, it doesn't surprise me.

Burticus's picture

Burticusita & I have been paying 15-20,000 cash FeRNs for their pre-owned, late model Mercedes sport sedans.  They still drive like a f45-65,000 cars and have so many electronics & accessories than I only know how to use 10% of 'em.

CJgipper's picture

Back lots.


Even in good economy states like texas, there are lots in the 5 acre category just FILLED with rows of inventory, especially unsold fleet.

SimpleJackBlack's picture
SimpleJackBlack (not verified) Sep 9, 2016 10:30 AM

It not a recession until it is. That is all.

Move along.

SomethingSomethingDarkSide's picture

Such fiction peddling will not be tolerated.  OFF WITH THEIR SPECULATING HEADS!

Allen_H's picture

Should be fun watching them trying to hold all of this fraudulent shit together, brace yourselves, keep investing in lead.

Zeusky Babarusky's picture

Brass, copper and blued steel should also be considered to diversify one's portfolio. And Spam, don't forget the Spam.

venturen's picture

Wholesale BULL$HIT...is selling well

gregga777's picture

The Feral Reserve, the Feral government and the Feral government's organs of state propaganda (mainstream media & entertainment oligopoly) will all Troy out their usual lies and try to spin this positively. The Feral Reserve, the Feral government and the Feral government's organs of state propaganda (mainstream media & entertainment oligopoly) deal in nothing but LIES LIES LIES LIES LIES.

Kprime's picture

with all this bad news why is the market having such a hard time today?  Did someone at the fed forget to set their alarm?  maybe it's just a hooker and cocaine hangover.  those .gov hookers like to sleep in and the .gov cocaine train was overloaded last night.

Spungo's picture

Good lord, Q1 2015 was shit. Fortunately I bought quite a bit of stuff at that time, so I'm prending to be a genius when certain stocks are up 20%.

dumbhandle's picture

The economy is expanding, starting in July.  Money will now be made on the backs of the bankrupt and we will pick at their bones.