On Monday, Census Department data showed durable-goods orders declined 1.1% for the month.
Yet, despite falling sales and a warning from GM, durable goods orders for autos and auto parts rose 1.2% in May. That was on top of a 0.5% gain in April.
The auto mystery continues as today’s advance trade data from the Census Department shows Wholesale inventories rose 0.3% and retail inventories rose 0.6%. The auto-related details were even more interesting.
International Trade in Goods by Category
Auto imports for the past two months are down a total of 4.6%. Auto exports for the past two months are up a net total of 0.7%.
This helped the balance of trade data but for the quarter, the balance of trade is still negative as noted in Trade Deficit Narrows as Exports Rise and Imports Drop: 2nd Quarter Trade Impact Still Negative.
Adjusted vs. Unadjusted Numbers
- Unadjusted, merchant inventories -0.9% in May and -0.9% in April
- Adjusted, merchant inventories +0.4% in May and -0.3% in April
- Unadjusted, retail inventories -0.7% in May and -0.4% in April
- Adjusted, retail inventories +0.6% in May and -0.2% in April
- Unadjusted, retail motor vehicles -1.0% in May and -0.1% in April
- Adjusted, retail motor vehicles +1.1% in May and -0.2% in April
That’s a 2.1 percentage point difference between motor vehicle inventories in May, adjusted vs. unadjusted.
Manufacturers’ Motor Vehicles and Parts Inventories, Seasonally Adjusted vs Unadjusted
The above chart shows manufacturers’ inventories of motor vehicles and parts.
The swings in deal inventories, month-over-month, unadjusted vs seasonally adjusted for the month of May are not wild.
Fred does not have the data I was looking for, retail trade motor vehicles and parts inventories seasonally adjusted and unadjusted.
I will do a followup report with data from the Census Bureau.
Auto Sales vs. Inventory Build
- June 26: GM Says “Market is Definitely Slowing” Lowers Outlook for Vehicle Sales
- June 1: Motor Vehicle Sales Flat, Hope Turns to Second Half: What About Fleet Sales? Incentives?
- May 2: Auto Sales Puke Again: Year-Over-Year Totals: GM -6%, Ford -7.2%, Toyota -4.4%, Fiat-Chrysler -7.0%
- April 3: Auto Sales Final Numbers: Down 5.7%, Two-Year Low; Don’t Worry, It’s Just a Plateau!
Despite slow sales, auto inventories are building.
If these numbers hold, inventories will likely, but not necessarily, add to second-quarter GDP.
For the inventory valuation discussion, please see GDP Estimation Crapshoot: When Errors Balance Out and When They Don’t
Mike “Mish” Shedlock
Reblogged this on World4Justice : NOW! Lobby Forum..
Inventories will add to second quarter GDP, then become a bigger and bigger problem in the second half of the year.
And the Fed is expected to raise interest rates again in December.
IMHO, highly doubtful.
This is clearly the last effort of Channel Stuffing before closure of manufacturing sites.
Channel stuffing is in play
ZH talked about that for years but sales kept up – Now?
I look for inventories to rise in the lead up to a recession. If they really jump look out. Why do you sweat the immediate gdp figures so much?
Medex Man said:
Too much debt to have a recovery. This is the case everywhere in the G7.
The US behaved like our leader was from a Chicago ghetto, and now we get Chicago ghetto results. Don’t like that analogy? who cares, but if your leader behaves like a Venezuelan socialist, you get Venezuelan results.
While you suffer and whine for more free sh!t from a bankrupt government, Obama is enjoying 5-star vacation after 5-star vacation… all over the world. His pension is guaranteed (by your tax dollars sucker!) — your pension is not funded, your retirement isn’t going to happen.
Retail inventories is the least of US voter worries
Thought I would put this clip to Fish and for all, but will tag it to you as Fish hasn’t commented yet. Quite a few know the history of US taxes, here is an example from the UK :
“The budget included several proposed tax increases to fund the Liberal welfare reforms. Income tax was held at nine pence in the pound (9d, or 3.75%) on incomes less than £2,000, which was equivalent to £190,000 in today’s money—but a higher rate of one shilling (12d, or 5%) was proposed on incomes greater than £2,000, and an additional surcharge or “super tax” of 6d (a further 2.5%) was proposed on the amount by which incomes of £5,000 (£470,000 today) or more exceeded £3,000 (£280,000 today).”
“There were many public meetings, some of them organised by dukes, which portrayed the budget as the thin end of the socialist wedge.”
It was eventually passed, but took a constitutional shake up to ‘achieve’ , as well as ammendments to parliamentary law. It isn’t that the pre-existing system was perfect, but the point is to note where modern socialist tendency was passed into policy in the UK. Not long after the ability of the upper house (of lords) to veto a Money Bill was removed. A bita history for you all.
Medex Man said:
@chrysangle — socialism, both declared and the slimey underhanded socialism that currently dominates the G7, is evil… and invariably leads to economic suffering to 99%, with a few greedy unethical politicians living large. Then the whole thing collapses into civil war and more suffering.
I get it that many PhDs in the USA support socialism, which only underlines that they aren’t as smart as they like to tell everyone. If they knew the first thing about socialism’s outcome, they would ban it from the classroom like they do Nazi-ism, which was the National SOCIALIST party of Germany.
Yeah, I said it. Bernie Sanders is a nazi, even if he is too senile (or corrupt) to admit it.
Where I notice socialism most starkly is not in a ‘bad’ way, and that is what disturbs me the most. I am talking about the young and naive who live it as a kind of dream state mixed in with their innocent aspirations and the kindness which is their own. Socialism truly disgusts me, as I have seen the mirror side to its existence played out to such destructive effect, I know what those mentioned are partaking in, often unwittingly, and I know how it will eventually encroach on all they are and honestly believe in. It is one of the worst expressions of the term society that I know of, particularly for the subtlety in its method of proscribing hypocrisy, as well as the inhuman nature of those who control and profit from its design.
I can consider basic income, taxation, etc. without being perturbed, but if someone starts using social concepts as ultimate justification then at that point I just have to reject the argument flat.
So for example:
“There is going to be a $1 tax to build schools”
Then they had better be schools, you owe me it.
“There is going to be a $1 tax that is to going to help create equal social opportunity”
Unfortunately, because the first might actually be enacted as the second, that is to say the expansive socialist mentality may be working behind the surface, I am liable to reject any idea of contribution. That is just one way socialism has ruined what were previously workable arrangements.
I was thinking that with Trump and the Republicans in control, they would be able to achieve the higher end of the 1-2% GDP growth range that I consider possible for the US, but now I’m thinking it will be the lower end of the range. Meanwhile, Canada is running close to 4% and Germany around 3%.
Tony Bennett said:
GM’s sales are dropping cuz their customer base is slowly dying. They’re no longer the bellwether.