Business Inventories Have Hit Pre-Crisis Levels
Slowing business sales—down 5% since their July 2014 peak—have pushed business inventories up 18.5% from their pre-recession peak in August 2008, according to the Census Bureau.
The Inventory-to-Sales Ratio, a measure of how overstocked businesses are, ballooned to 1.4 in January—compared to only 1.32 in September 2008, when Lehman Bros went bankrupt, Wolf Street reports.
Interestingly, rising inventories spike GDP, giving off the impression the economy is going strong—until things drop off.
There’s been a lot of back and forth between high rollers on a possible recession lately, with “the grave dancer” Sam Zell predicting one in the next year, and fellow billionaire Warren Buffett as cool as a cucumber about the economy. [Wolf Street]