Inventories hurt U.S. third-quarter GDP, domestic demand strong


#1

U.S. economic growth braked sharply in the third quarter as businesses cut back on restocking warehouses to work off an inventory glut, but solid domestic demand could encourage the Federal Reserve to raise interest rates in December.
Gross domestic product increased at a 1.5 percent annual rate after expanding at a 3.9 percent clip in the second quarter, the Commerce Department said on Thursday.
The inventory drag, however, is likely to be temporary and economists expect growth to pick up in the fourth quarter given strong domestic fundamentals.
The Fed on Wednesday described the economy as expanding at a “moderate” pace and put a December rate hike on the table with a direct reference to its next policy meeting. The U.S. central bank has kept benchmark overnight interest rates near zero since December 2008.

https://ca.news.yahoo.com/inventories-seen-weighing-u-third-quarter-growth-050422855--business.html

First figures coming out of Washington are suspect since this administration is known for their lying. Secondly what is not mentioned is that real unemployment so high and that tells me that people can not afford the products made so the inventories are higher than normal which means even more people will have to be laid off.

The economy is not booming just the policies of the federal government as well as state governments which have imposed even more taxes,regulations, and fees on business and citizens. It is now said the median income is now below $30,000 and real earning power has gone back to many years in the past. The U.S. is spiraling into a third world nation.

http://www.bls.gov/news.release/empsit.t15.htm

In Washington in the dead of the night the debt limit has been raised once again with the cooperation of Boehner. This administration has no end to funding their pet projects as well as throw money at enemies they like to call friends.


#2

How do they know how much inventory is on hand, when those reports are only filed once a year.


#3

[quote=“Cruella, post:2, topic:47583”]
How do they know how much inventory is on hand, when those reports are only filed once a year.
[/quote]Most places carry what they call a perpetual inventory and check against that once or twice a year to ensure accuracy. Now in this case if people can not afford the products there is no need to stock more inventory because inventory cost money not only in storage but having the product made. That money can be used for other stuff or be available in the case of emergencies.


#4

I’m very familiar with inventory. Worked in cost accounting for several years.

My guess is they are calling up companies. I can’t think of any reporting a company does that shows what their inventory levels are, outside of yearly tax reporting.


#5

I thought most companies use the “just on time” inventory method.


#6

It depends on the company and what type of inventory it is. We have material inventories which are used to make products and inventories of final goodies. In the case of a store, the warehouse would not need to carry a large quantity if demand is down. With the advent of computers it is a lot easier to run a perpetual inventory and as the product is sold the computer can tell you what is needed. When I had a Hardware store we ordered merchandise manually and kept some items in more quantities for contractors who would buy by the case. With a computer system in place we were getting what we called the blue book from the warehouse which told us which items actually moved off the shelf and those that languished. Throw in product placement such as end caps and positioning in the store and shelfs a product can have a good turn over or not.

In the end what I was referring to was that if people do not have the money to purchase said products there is no need to stock as much which forms a chain reaction which cause layoffs because of reduced purchasing power.

We have a ton of people unemployed which includes illegals which seem to be ignored by this administration. Meanwhile the cost of goods are still rising no matter what the government claims is no inflation. Gas has been all over the place. Purchasing power is down in that it takes a lot more to pay for that bag of groceries or other items. In spite of Norman’s claim we are doing better this nation is sinking with more people homeless or seniors having to take adult children back into their homes because of job losses.

Black friday will be upon us in three weeks and I will be interested in seeing sales figures