Inventory Build

Output, sales and inventory measures for the economy show reasonable balance save for distributors or wholesalers. Spring sales are running about 8% ahead of last year, but inventories are 12% higher. With distributor sales stronger than both factory and retail, there is likely some involuntary inventory accumulation which will eventually feedback to the factory level. This is a normal development and may extend the slowing of the economy until inventories are trimmed. The imbalance at the distributor level may also affect imports mildy.