Friday, February 13, 2009

Business Sales and Inventories (December)

LA Times reports:

Inventories at U.S. businesses fell more than forecast in December and the most since 2001 as companies responded to slumping sales that reflect a deepening recession.

The 1.3 percent drop in the value of unsold goods at factories, retailers and wholesalers followed a revised 1.1 percent decline in the prior month, the Commerce Department said today in Washington. Sales fell 3.2 percent after a 5.7 percent decline in November.

So while inventories are shrinking at a rapid pace, sales are falling even faster.

Looking over a longer time frame (year over year, rather than month over month) we see sales that have plummeted and inventories at almost exactly the same level. Awfully bearish for expectations of production growth going forward.

Source: Census

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