Wholesalers Slash Inventories in Feb.
Wholesalers slashed their inventories in February by 1.5 percent, the sharpest drop in 17 years, as companies worked to get their stockpiles in line with the reduced demand caused by the recession.
The Commerce Department wholesale numbers, released moments ago, showed a drop that was more than double what forecasters projected for February.
It's easy to see the reduction as an assurance that the contraction is continuing. However, the sooner wholesalers adjust their inventories to match diminished demand, the closer they come to resuming profitability.
-- Frank Ahrens
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By
Frank Ahrens
|
April 8, 2009; 10:41 AM ET
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The Ticker
| Tags: Commerce Department, Wholesale investories
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Posted by: ajackson3 | April 8, 2009 10:57 AM | Report abuse
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This is good! When retailers, wholesalers and the markets start making adjustments like this you see a quarter or two later a stabling of the economy and eventually a rise in the economy as these businesses become profitable from trimming down their inventories that were costing them money sitting on shelves or in warehouses.