When this morning's blockbuster retail sales beat hit the tape, stocks pulled back for fear it would keep the Fed higher for longer. It took three minutes for markets to realize that the Fed doesn't matter anymore: we're in a boom.
Supply Chain Stress Monitor
Supply Chain Stress Monitor
Thursday, March 14, 2024
Inventories-to-sales ratios are rising across the economy, but still at low levels (still negative for retail ex-auto). Directionally, you can call it an inventory overhang, but that's only compared to the inventory shortages of two years ago. Like so many things today, it is in fact normalization.
Supply Chain Stress Monitor
Thursday, February 15, 2024
Retail sales fell in January from an all-time high. But even if you read the worst into that, it's hard to get a recession started when inventories are almost historically tight (even with supply chains wide open).
Supply Chain Stress Monitor
Wednesday, January 17, 2024
A big beat in retail sales has everyone freaked out about the Fed again this morning. But the increasing disjunction between rising sales and flat to falling inventories is an important spur to growth and bulwark against recession.
Supply Chain Stress Monitor
Thursday, December 14, 2023
The retail inventory/sales ratio goes negative -- a bulwark against possible recession. Meanwhile, our global supply chain stress indices all look perfectly normal.
Supply Chain Stress Monitor
Wednesday, November 15, 2023
According to the NY Fed's index, supply chain stress is the lowest in the history of the data going all the way back to 2016. In case you thought stress was a cause of inflation (too much money, too few goods, all that kind of thing), you can relax. Do you hear me Mr. Chair?
Supply Chain Stress Monitor
Tuesday, October 17, 2023
Bombshell beat in retail sales. Ex-auto inventory/sales ratio likely negative! This will push up the GDPNow estimate of real Q3 GDP even further above an already amazing 5.15%.
Supply Chain Stress Monitor
Thursday, September 14, 2023
A lovely bump in retail sales squeezes the inventories/sales ratio. The "inventory overhang" argument for recession is dead and buried.
Supply Chain Stress Monitor
Tuesday, August 15, 2023
Five months into a banking crisis and a lending chill, retail sales (with or without autos) make a new all-time high, and inventories stay more than under control.
Supply Chain Stress Monitor
Tuesday, July 18, 2023
Retail sales grow, but less than last month and well below consensus -- and it's not supply chains, they're all completely restored according to all indicators. With bank lending now flat in the four months since Silicon Valley Bank failed, and CPI within a hair of the Fed's target, what possible reason is there for raising rates at next week's FOMC?