The Urethane Blog

Economy Appears to be Slowing

Abysmal Wholesale Sales Join Factory Orders In Confirming US Economic Contraction

Submitted by Tyler Durden on 04/09/2015 10:37 -0400


Despite another data series revision by the Department of Commerce, there was no way to put lipstick on the pig of America's wholesale trade data, and as reported moments ago, the all important merchant sales for February dropped for 3rd month in a row in February, the longest stretch since the last recession. After January's downward revised plunge of 3.6% MoM (against -0.5% expectations), which was the biggest single monthly drop since March 2009, the decline continued in February at a -0.2% pace, wiping the floor with expectations of a 0.3% rebound.

Worst of all the annual pace of decline has now stretched over both January and February, confirming that 2015 is now officially a year of contraction for the US economy. As a reminder, every time this series suffers an annual decline, there is a recession.


Worse, not expecting the drop in demand, wholesales built up inventories once more, with wholesale inventories rising by 0.3%, above the 0.2% expected, and as a result the Inventory to Sales ratio has hit a new post-Lehman high of 1.29.

The above should not come as a surprise: a parallel and just as important data series, the US factory orders, also confirmed a week ago that the US is now in a recession, when Factory Orders tumbled by 4.3% Y/Y, their worst annual decline since, you got it, Lehman.

Source: Census Bureau