The news all around seems to be pessimistic. The wholesale trade report in US is also predictably downward and depressing. There is a fear that the sales will go down due to the prices. The third quarter GDP report had predicted a fall of 0.3 % but it is reported at 0.7%. The September data shows that price swings continue to have a great impact on sale inventories. There was a 1.5% September sales drop that was led by a 1.9% nondurable decline alongside a 1.0% durable decrease. This had a 1.45 decrease which is a price led nondurable and also a 0.85 which is a durable goods increase.
“Today’s data are consistent with our downwardly revised -3.0% fourth-quarter GDP figure with a big $47 billion inventory subtraction that will leave a huge $97 billion fourth-quarter inventory liquidation rate. Today’s wholesale data brought a rise in the inventory-to-sales (I/S) ratio to 1.12 in September from 1.10 in August and an all-time low of 1.06 as recently as June, and this ratio should rise further to 1.17 by November, as prices drive sales down faster than inventories.” Says the report
The International Council of Shopping Centers’ statistics show that sales in October were the lowest in 35 years. The shoppers kept away from Malls and sales hit an all time low. Most stores were hit but Walmart surprisingly reported an increase of 2.4% in October. For other stores the plunge was as deep as 4.2%.
