What is taking place on the wholesale level of the supply chain is simply unprecedented. Admittedly, the current iteration of the wholesale data series only dates back to 1992, so there is some possibility of a similar disparity at some point in actual economic history. However, at present, inventory continues onward with only a slight deviation and slowing recently while sales contract further and further. Year-over-year, wholesale sales declined 5% in August, marking the second worst monthly drop of the recovery behind only May. Worse, the outlines of the ‘dollar’ waves are clearly visible and not just in the non-adjusted annual rates of change; even the seasonally-adjusted figures show the big contraction of early 2015, the slight rebound in the middle and now a renewal.
This post was published at David Stockmans Contra Corner by Jeffrey P. Snider ‘ October 9, 2015.
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