by Calculated Risk on 11/16/2009 10:00:00 AM

The Manufacturing and Trade Inventories and Sales report from the Census Bureau today showed inventories are still declining.

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The Census Bureau reported:

Manufacturers’ and trade inventories, adjusted for seasonal variations but not for price changes, were estimated at an end-of-month level of $1,303.4 billion, down 0.4 percent (±0.1%) from August 2009 and down 13.4 percent (±0.3%) from September 2008.

The total business inventories/sales ratio based on seasonally adjusted data at the end of September was 1.32. The September 2008 ratio was 1.32.

Inventory levels are still a little high compared to lower sales levels, and further inventory reductions are probably coming. Although changes in private inventories made a positive contribution to Q3 GDP in the preliminary report, the usual inventory restocking cycle at the beginning of a recovery will probably be muted without a pickup in final demand.