Following the surge in sales (on higher petroleum costs) in June (and modest build in inventories), the sales-stock ratio fell back from cycle highs (though remained deep in recessionary territory). July's preliminary data showed a notable slowdown in inventories (-0.02% vs a 0.1% expected gain and revised lower 0.2%) confirming recent PMI data of no pickup in growth in Q3. For 32 months straight, inventory growth has outpacced sales growth year-over-year with 18 straight months of wholesale sales declines.
Simply put – as slow as Q2 was, that was the inventory bounceback… and Q3 has slowed already, breaking the extrapolators narrative…
But none of that matters because Janet is speaking today.
Charts: Bloomberg
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