USD Business Inventories


The business inventories released by the U.S Census Bureau which measure the unsold goods held by retailers, manufacturers and wholesalers. Often times, business inventories have the ability of showing economic turning points. A noticeable inventory decrease signals that the economy is in the process of rapid growth due to stockrooms for businesses being empty and in need of replenishment. This, in turn, triggers overall higher production. Business inventories are also highly useful when observed in conjunction with total business sales. Inventories on the rise, together with slackening business sales suggest the turmoil in the upcoming economic times. However, when sales slow down, retailer inventories increase and are thus forced to cut down on wholesale orders. Wholesalers, due to the fear of inflated inventories, will slow or even go as far as to shut down production entirely. Recent technological developments now allow companies to better manage their inventories, thus keeping inventory levels lower. Consequently, inventory store declines suggest an increase in productivity. The aforementioned logistical advances, however, put great emphasis upon growing inventories. The stock of goods increase is indicative of declining demand in America. The Advanced Retail Sales report features a lag time of a mere two weeks, whereas the Business Inventories figure is released along with the Advanced Retail Sales report. Because the Business Inventories' lag time is triple that of the Advanced Retail Sales report it is an indicator that follows rather than lead the overall economic pace, therefore causing market participants to focus more on the Advanced Retail Sales figure.

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