Business Inventories

Through 2/08, total business inventories growth has accelerated
to 8.7% annualized. That is much faster than the growth of final
demand, so we are now seeing some involuntary inventory
accumulation. Ballooning inventories can make a downturn far
worse if they are not brought quickly to heel. So far in this cycle,
inventory management has been keen, and one might expect a
fast adjustment. However, you need to watch inventory data
very carefully once a downturn has started, because it can be a big
risk factor in the outlook. Fortunately, end-stage or retail inventories
do seem to be under good control, at least through February.

BS Warning

2008 is national election year, and with all that is at stake among the
political players and their minions and friends, you will find that even
independent economists and analysts are not immune to "spinning" for
their favorites. Most of the BS is deliberate but some springs forth
from the unconscious, so to speak. When reading the economists and
pundits on the US and its problems, get a second opinion.