The 0.7% U.S. August business inventory rise
The 0.7% U.S. August business inventory rise after a boost in the July gain to 0.3% from 0.2% matched estimates, with a 0.7% retail inventory rise that repeated the gain from the advance indicator report. Analysts saw the already-reported 0.4% rise for factories and a 0.9% wholesale gain released earlier that undershot the 1.0% advance figure. Analysts still expect Q3 GDP growth of 3.2% with a flat Q3 inventory contribution that leaves a tiny $5 B accumulation rate, after a $4.3 B Q2 contribution. Inventories have yet to recover from the big 2015-2016 petro-hit despite a factory sector recovery. The economy remains plagued by a high inventory-to-sales (I/S) ratio, which remained at 1.38 for a third consecutive month in August from 1.37 over the prior six months, versus a 1.42 expansion-high over the three months of Q1 in 2016. The ratio is well above the 1.27-1.31 ratios between May of 2012 and September of 2014 before the big oil price hit, and is certainly well above the 1.24 floor seen in March of 2011.