Recession watchers stay tuned... Wholesale Sales rose a mere 0.3% MoM (missing expectations of a 0.9% rise) but sales tumbled 3.4% YoY - the most since the financial crisis. Hopers will look at the rise in inventories (+0.8% MoM vs +0.3% exp.) as GDP positive but at some point the hope for a sales pick up fades and inventory stuffing stops (Sales -3.4% YoY, Inventories +5.0% YoY). But what should be worrying everyone right now is the inventory-to-sales ratio holding at recession levels.
Big miss in MoM sales and biggest drop in YoY sales since the financial crisis...
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and along with a surge in inventories, leaves the critical inventory-to-sales ratio flashing red...
[4]
And guess where inventrories are soaring the most...
[5]
Here's why this matters so much, as we explained previously... [6]
[7]
Despite 22 years of correlations (and obvious causations), asset-gatherers and commission-takers still think this time is different and channel-stuffing and 'if we build it, they will come' inventory overbuilds will be bought away in a swarm of freshfaced crappy creditworthiness consumers... not this time - as peak debt is now upon us.
Charts: Bloomberg
