tag:blogger.com,1999:blog-11027528911364475.post2016024981942665023..comments2024-02-18T21:10:05.205-08:00Comments on EconomPic: Promising Wholesale FiguresJakehttp://www.blogger.com/profile/07946497592651234440noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-11027528911364475.post-77286579377552522382010-03-10T08:15:30.593-08:002010-03-10T08:15:30.593-08:00Greg:
No to #1... as I stated:
"If one were...Greg:<br /><br />No to #1... as I stated:<br /><br />"If one were to believe these figures, then on the margin this is likely a detractor for Q4 GDP and Q1 GDP"<br /><br />For Q1, I question whether Q1 was "real" vs. a nominal price decline (following a nominal price increase in Q4). If inventories actually fell in January, then this is bad for January, but good for future production (given a level of end-use, production will occur in the past or future... low inventories means it will happen in the future all else equal).<br /><br />In response to #3.... yes. As detailed above, an increase would mean that the actual production in the economy increased in that period(sales can be either from production or inventories... whereas sales less inventory decline = actual production).<br /><br />This is how the cycle works and why inventory rebuilds lead the economy out of recessions... the question this time is will it be enough with a struggling consumer.<br /><br />I hope that helps clarify.Jakehttps://www.blogger.com/profile/07946497592651234440noreply@blogger.comtag:blogger.com,1999:blog-11027528911364475.post-758708581990120642010-03-10T07:58:30.619-08:002010-03-10T07:58:30.619-08:00Just to make sure I understand how this works:
1....Just to make sure I understand how this works:<br /><br />1. Inventories fell in December by more than we previously thought they had fallen. This decline in inventories means nothing to the economy.<br /><br />2. Inventories fell January instead of increasing. This decline in inventories is a good sign for the economy.<br /><br />3. The real question is when inventories will increase instead of falling, because an increase in inventories would be a VERY good sign for the economy.<br /><br />Is that right?Anonymousnoreply@blogger.com