AP Economy Writers Get Something Right!!!! But, Still Insist On Babbling Inanity!!! More Bad News In US Economy!

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Well, at least this article got something correct.  US Inventories rise again!!!! 

US wholesale stockpiles in June show largest gain in year

WASHINGTON (AP) — U.S. wholesalers increased their stockpiles in June by the largest amount in more than a year, while sales crept up slightly.

The Commerce Department said Tuesday that wholesale stockpiles rose 0.9 percent, the largest monthly gain since April 2014. Sales increased 0.1 percent in June yet have dropped 3.8 percent over the past year largely because of cheaper oil prices.

The rising inventory levels in June possibly suggest that businesses are more confident about an increase in consumer spending and economic growth. But if sales fail to grow at the same pace as inventories, then the excess supplies could force companies to cut orders and dampen overall growth.

The June rise in stockpiles left inventories at the wholesale level at a seasonally adjusted $586 billion, 5.4 percent above a year ago.

Many economists expect stockpile levels to continue increasing as consumer demand improves and the precipitous drop in oil prices, which began in the middle of last year, has settled at slightly less than $50 a barrel. Wholesale inventories of petroleum have fallen 18.2 percent in the past 12 months.

But that increase in inventories must be matched by a similarly large rise in sales that has yet to occur.

The U.S. economy has endured a sluggish, six-year recovery from the Great Recession. During the first half of 2015, the economy grew at a modest annual rate of 1.5 percent, slightly less than the 2 percent average during the previous five years.

Economists say that growth should accelerate through the end of the year. But these forecasts depend on a strong job market boosting consumer spending. Last week, the government reported that payrolls increased a solid 215,000 in July. The steady gains suggest that employers expect the economy to continue expanding.

The solid job growth has led many analysts to say that the Federal Reserve will begin raising a key interest rate as early as September, the first increase in nearly a decade.

This is circular stupidity!  But, within it, there’s a modicum of truth.  If sales fail to grow, then companies will cut.  It’s that simple. 

As to the circular stupidity, the AP states sales dropped 3.8% from last year because of the dramatic decrease in the value of oil.  (Apparently, they’re counting dollars rather than units.)  But, that cuts both ways, then, right?  AP then states that our inventories in Dollars, has risen 5.4% over a year ago.  Weird, because we have stockpiles of oil.  If the oil prices caused a drop in sales, then, oil prices should have caused a drop in inventory value.  And, they state, “Wholesale inventories of petroleum have fallen 18.2 percent in the past 12 months”.  So, if that’s true, and the 5.4% for all inventories are true, then, we’re in a world of hurt!

I’m about sick of reading about our steady job increases.  These are McJobs they’re counting and everyone knows it.  What’s happening is the unemployment benefits have run out for millions of people and they’re going back to work for pay less than what unemployment was paying. 

But, I digress.  There is no business in the world who enjoys stockpiling inventory.  They make and produce things to sell, not to sit around some warehouse hoping someone will buy their wares.  The 5.4% is alarming, couple that with the 18.2% decrease in petroleum …….

NOTE!!!!!!  All things being equal, that is to say the amount of petroleum we have in inventory is the same amount as we had last June, then petroleum inventory value should have decreased about 50%!  Last June the value of oil was about $100/barrel.  As noted in the article, it’s below $50 today.  This means, we’re not selling petroleum in spite of the dramatic decrease in the price.  Petroleum sales, per unit, is a prime indicator towards the health of an economy in today’s world.  It’s one of the most important commodities which allows us to do and go. 

Now, given the last economic post I wrote about Russia being in a recession, and given that China was forced to devalue it’s currency and it’s stock market freefall, the Eurozone’s chronic stagnation, Japan’s race toward irrelevancy, how is it that we’re not in the midst of another global recession?

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5 Responses to AP Economy Writers Get Something Right!!!! But, Still Insist On Babbling Inanity!!! More Bad News In US Economy!

  1. Latitude says:

    Didn’t it snow in Wyoming or Montana in June?….see, it was the bad weather again

  2. gator69 says:

    The new messiah can feed us all on one fish, and one loaf of bread. Obamanomics meets Common Core.

  3. DirkH says:

    “how is it that we’re not in the midst of another global recession?”

    We are in a global currency regime shift. The 1971 petrodollar regime is ending.

    ” the Eurozone’s chronic stagnation, ”

    Overall the EU stagnates. Germany has cooled down from white hot to red hot due to the Russian sanctions. Meaning, in Southern Europe it’s an absolute collapse.

  4. Pingback: Aww……. If The Poor Stupid Bastards Had Just Listened To Suyts!!!!! Stock Market Continues Spiral!!!! | suyts space

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