Inventories in the USA are rising.  Rising inventories are never a good thing in business because employers are more likely to cut back on staff and less likely to hire new people when their warehouses are filling up with products.  Below, is a graph of US inventories for nearly the past 3 decades – note that the last data point is for April, 2019.

Inventories

There is some good news here, however.  Rising inventories usually occur during good economic times.  The next graph shows data of economic recessions.  Notice that inventories dip during a recession.

recessions.png

The dips in inventories and the occurrences of recessions correlate well.  The economic books that I read say that it is the run up in inventories that brings the economic recessions.  Some have hinted that the inventories are pushed up by special interest and the budget deficit.  I don’t know the future; but, why is my knee shaking?

heinad

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