Monday, January 11, 2010

Breaking Down Wholesale Inventories

Friday's surprise 1.5% gain in Wholesale Inventories (i.e. what appeared to be an inventory rebuild) was not real, just like last month's post Wholesale Inventory Correction isn't "Real" in October. As can be seen below, the spike was entirely to Farm Products (Wholesale Inventories ex Farm Products was 0.1%) and Farm Products (both livestock and grains) rocketed in price in November.

In other words, this was a nominal gain, thus will not positively impact GDP in Q4.

Source: Census