Business Inventories Rise Unexpectedly

[NNN0LHI]

http://story.news.yahoo.com/news?tmpl=story&cid=568&ncid=749&e=1&u=/nm/20031117/bs_nm/economy_inventories_dc

WASHINGTON (Reuters) - U.S. business inventories unexpectedly rose 0.3 percent in September as unsold stocks of autos accumulated at the fastest clip since February, a government report showed on Monday.

Analysts polled by Reuters had been expecting inventories to remain unchanged.

Motor vehicle and parts inventories rose 1.5 percent, the sharpest increase since a 2.1 percent rise in February, the Commerce Department said. Retail inventories excluding cars rose 0.8 percent, the steepest climb since May 2000.

It was the biggest rise in overall inventories since a matching 0.3 percent gain in March.

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[Sinistrous]

1. What effect did this have on the "7.2 %" boomlet alleged for the 3rd qtr?

I hope an economist on board can comment.

[Barrett808]

4. I'm not an economist, but I always suspect the Bush mafia...

...of cooking the books.

[JeebusH]

2. sounds like a slowing economy if businesses can't sell their crap ...

but according to Bush and the Repukes, dead soldiers and bombings = progress in Iraq, so I might be wrong on this

[jenk]

20. people should be buying for the holiday season

and they're not

[TahitiNut]

3. That's bad news for employment.

When inventories go up, employment usually goes down. An increase in auto inventories at this time of year is not good news. Automakers typically accumulate greater inventories prior to a model year changeover, not subsequent to one.

[pw]

5. Unexpected increase means

They're making 'em faster than people can buy 'em. So not only do they have to lay people off to get the pace down, they have to lay off more people until the surplus is gone. So much for that rapidly-growing economy.

[yellowcanine]

6. Oops - Is the "recovery" over?

Autos were a big part of the third quarter growth. Lots of low financing deals out there as well as people using house refinance cash to buy cars. If auto inventories grew in spite of this, that is definately not a good sign.
so - Lets Review.

Bush inherited largest budget surplus ever and turned it into largest deficit ever.

He inherited a mild correction/recession (so mild the recovery had actually begun before economists realized we were in a recession) following the largest increase in net jobs ever and turned it into the only net loss of jobs since Herbert Hoover.

Bush benefited from the greatest outpouring of good will from around the world after 9/11/01 and today that is completely reversed, even among our traditional allies.

For the first time in U.S. history, preemptive war is official U.S. military policy.

Our military is the most over extended since WWII, to the point of a possible, even probable, return of the draft for the first time since 1971 after election day, 2004.

Why would anyone want to give this man a second term?

[Ernesto]

12. YC.. You got it right

@ the end of Sept, California new cars were flying off the lots. I know cause I was in the hunt for the "perfect deal". With factory specials ending on 9/31 & auto registration fees tripling on 10/1, there was a mad rush. I was able to close my deal on 9/29 and saved a bundle.... Now it seems that Californians are waiting for Arnold to repeal the "car tax" before they even think about buying. This could be the 1st negative empact from electing an action-figure to the state house.

[Voltaire99]

17. Because...

...they'd rather go down with a man they love than rise with a man they hate.

Not to question your nice review of the lowpoints of Bush's reign, but they won't matter as much as the intangibles. The election, in other words, is likely to be decided on other than empirical data or rational grounds.

Specifically, it's going to turn on the irrational process of projecting "qualities" on to each candidate's "character" - these being representations of the themes at the heart of our culture wars (religion, honor, responsibility, sacrifice, privilege, social freedom, regional identity).

That's why the nomination process underway is also a litmus test of each candidate's ability to sell himself as a tabula rasa; not too much this, not too much that. Something nice and bland: an All-American.

Unfortunately for the Dems, Bush is the ultimate blank slate and his handlers are masters of disguise...

[Bonhomme Richard]

7. I swear that I heard last month

that they were saying that inventories were increasing and that was good for the economy. Making the suggestion that manufacturing was going up. That was the spin but I couldn't tie that in with the fact that consumer spending had dropped. So here we have the real reason that inventories are up and it's because products are not moving off the shelf as quickly as it's being made.
It's all so much bullshit. Productivity rises and thats because the poor schmuck that still has a job is working his ass off, putting in more hours so the company doesn't have to hire anybody and the CEO can still take home his 411 times salary as the luckles schmuck is thankful he still has a job. To add insult to injury that guy probably voted republican.
Forgive me but I'm on a rant today.

[BuckeFushe]

8. More bad news not yet making the rounds

Wayne, New Jersey-based Toys R Us said it would close all 146 of its Kids R Us stores, as well as 36 Imaginarium stores, which sell educational toys and games, and three distribution centers that support those stores.

The closures will boost operating earnings but will mean restructuring and other charges totaling $280 million before taxes, to be taken mostly in the current quarter, the company said.

Most of the facilities are expected to close on or before Jan. 31, it added.

"If the Kids R Us decision doesn't help Toys R Us, you wonder what more they can do. "They remodeled stores, the inventory is fresher, pricing sharper, the help more helpful. If it still winds up coming up short, what else it there?"

http://abcnews.go.com/wire/Business/reuters20031117_131.html

Thank you Shrub for our wonderful economy.

[54anickel]

9. Another casuality of Wal-Mart? Or less disposable income?

I thought they had a pretty good gig going.

[jenk]

21. kids r us around here have been ghost towns

[pmbryant]

10. Doesn't sound good

From the article, the last time inventories rose so quickly was back in February and March. Back then, as I recall, the economy was in the dumps in anticipation of the Iraq war.

So I strongly suspect this is not a good economic indicator.

:shrug:

--Peter

[Zech Marquis]

11. I'm not an economics genius

but extra inventory means less sales, less money in my pocket on payday, and fewer goodies I can buy. So much for that 7 point whatever GDP rise, huh? :eyes:

[Yavin4]

13. The Cheap Debt Era Is Coming To An End

Interest rates are creeping up, so there's less money available to consumers. You cannot build an economy solely based on consumption. You have to have a growth industry. You need a fast growing industry that will raise salaries across the board. You can't keep extending debt forever. At some point, people will need a good paying job in order to pay off all of their debt.

Thus, what you're seeing is people slowing reigning in their spending.

[Ernesto]

14. Bingo!

You Yavin4 have just won the nobel prize for "tellin it like it is".

[54anickel]

15. Funny, NPR news just said this was a good thing.

Honest, they said rising inventory is because business expect rising demand for products. Like they are gearing up for bigs sales or something. :eyes:
Just heard it in the car on my way home.
Silly NPR.

[tkmorris]

18. Doesn't wash though

The article itself terms the inventory surpluses as "unexpected". To me this means that manufacturers expected to sell those goods but didn't. Consumers have slowed their spemding.

In response to decreased consumer demand most manufacturers respond by decreasing production, usually including laying off some of their no longer needed workforce. This results in even LESS consumer spending due to higher unemployment. A vicious cycle.

The only positive is that all this really puts the brakes on inflation.

Of course I'm sure you know all this, I just felt the need to type it all out. :D

Edited because the voices in my head told me to.

[54anickel]

19. Thanks. So I guess NPR missed that "unexpected" word.

So we can possibly expect even MORE layoffs? Cripes, I know more people that have been laid off than people that have not (yet that is).
Thanks for pointing out the positive on inflation. Nice to have something to hold on to these days.
Guess there's always a silver lining if you look hard enough. B-)

[grannylib]

16. May be a temporary bump, due to anticipated need, but has not yet

resulted in new jobs for more people to create that inventory; I have been hearing about all the OT and whatnot that companies are requiring of those who still are fortunate to have jobs, and that people are burning out fast but have not many options, given the state of the jobless economy...
So no, I think this is bad news all the way around.