How to Uncover Hidden Economic Weakness!

"Having just written How to Uncover the Hidden Consumer Strength!, I think it's only fair to see if there is a way to uncover hidden weakness.

Business inventories provide a method. The consensus estimate for month-over-month changes in inventories was +0.1% but the actual change was 0.0%. 

To see if we can spot the weakness, let's once again start with analysis from a Bloomberg Econoday report, this time on inventories. 

 Businesses appear to be putting the brakes on inventories which however are still rising a bit relative to sales. Business inventories were unchanged in October with September revised down 2 tenths to plus 0.3 percent in readings that will pull down the GDP outlook slightly. Sales came in unchanged which is just enough to drive up the stock-to-sales ratio to 1.38 from 1.37. This time last year, this reading was at 1.31.

All three components show only the most minimal change in inventories, up 0.1 percent for retailers and down 0.1 percent for both manufacturers and for wholesalers. And sales tell the story, unchanged in October for both retailers and wholesalers and down 5 tenths for manufacturers.

The lack of punch in the economy, the result of weak foreign demand, continues to put upward pressure on inventories. But businesses are successfully keeping their stocks as low as possible, thereby limiting future corrections in production and employment..."

at http://globaleconomicanalysis.blogspot.com/2015/12/how-to-uncover-hidden-economic-weakness.html#I6dymsQzs0E5ofW3.99