wolfstreet.com / by Wolf Richter /
Wholesale inventories-sales ratio spikes worse than in Oct. 2008
A month ago, when I last wrote about it, I half-figured, half-hoped that the lousy wholesale inventories and sales for December had been a fluke, that some numbers had gotten lost in the shuffle, that the trend would reverse in January. Now the January data is out. And it’s terrible.This time, there weren’t any redeeming qualities left.
Inventories tie up cash. So inventory management has become a sophisticated obsession, tightly connected to sales forecasting. Merchants who are optimistic about sales prospects stock up for it. When these hopes turn into crummy sales, inventories begin to balloon, and the crucial inventories-sales ratio rises to ugly levels.
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