Business Inventories Keep Piling Up

On inventories, the manufacturers’ and trade figures were estimated at an end-of-month level unchanged at $1.811 trillion versus from July 2015. The inventories were up 2.4% versus August 2014.

A key measure that is viewed each month is the inventories-to-sales ratio. The total business inventories-to-sales ratio at the end of August was 1.37 on a seasonally adjusted basis. The July 2015 inventories-to-sales ratio was 1.36, and the August 2014 ratio was 1.30.

Unfortunately, this is more economic weakness seen when you look at the seasonally adjusted data versus a year ago. That being said, August was also the month that the data coming out of China was causing panic in the financial markets.

With this being six weeks after the fact, most investors and economists may dismiss the report, even if the report carries some high concerns.

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