{"id":58669,"date":"2021-07-19T07:08:20","date_gmt":"2021-07-19T12:08:20","guid":{"rendered":"https:\/\/olduvai.ca\/?p=58669"},"modified":"2021-07-19T07:12:45","modified_gmt":"2021-07-19T12:12:45","slug":"plunge-of-retail-inventories-collapse-of-new-used-vehicle-inventories-the-shortages-depicted-in-charts","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=58669","title":{"rendered":"Plunge of Retail Inventories, Collapse of New & Used Vehicle Inventories: The Shortages Depicted in Charts"},"content":{"rendered":"
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Plunge of Retail Inventories, Collapse of New & Used Vehicle Inventories: The Shortages Depicted in Charts<\/a><\/h3>\n

Inventories at retailers document this mess.\u00a0<\/strong><\/h1>\n<\/header>\n
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Turns out, when the US government spends $5 trillion in borrowed fiscal stimulus over 16 months, and the Fed hands out $4 trillion in monetary stimulus over the same period, causing asset prices to boom, demand for goods is going to wash over the land in tsunami-like waves, and supply chains that snake all over the world, amid finely honed just-in-time-inventory strategies, get tangled up. And as\u00a0retail sales spiked in a historic manner<\/a>, shortages of all kinds have been cropping up, including the\u00a0semiconductor shortage that has slammed the auto industry with a vengeance<\/a>.<\/p>\n

Inventories at retailers document this mess. Inventories are tight all around, but they\u2019re in catastrophic condition at auto dealers, which before the pandemic accounted for over one-third of total retail inventories.<\/p>\n

Inventories at new vehicle dealers, used vehicle dealers, and parts dealers fell to $153 billion in May, down 36% from May 2019, according to data released by the\u00a0Census Bureau<\/a>\u00a0on Friday. And the inventory-sales ratio \u2013 with inventories and sales both in dollars, the impact of inflation gets canceled out \u2013 dropped to 1.14, the lowest level in the data going back to 1992:<\/p>\n

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The inventory-sales ratio (inventories divided by sales) is a standard metric in the retail industry. A ratio of 1 means that the retailer has enough goods in inventory for one month of sales at the current rate of sales. This would be 30 days\u2019 supply. A ratio of 2 \u2013 meaning 60 days\u2019 supply \u2013 is considered healthy in the auto industry.<\/p>\n

In dollar terms: The ever-more expensive vehicles in inventory over the years explain all of the long-term rise of inventories in the chart below. Unit retail sales \u2013 and unit inventories with them…<\/p>\n

\u2026click on the above link to read the rest of the article\u2026<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Plunge of Retail Inventories, Collapse of New & Used Vehicle Inventories: The Shortages Depicted in Charts Inventories at retailers document this mess.\u00a0 Turns out, when the US government spends $5 trillion in borrowed fiscal stimulus over 16 months, and the Fed hands out $4 trillion in monetary stimulus over the same period, causing asset prices […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[13343,4053,1427,3237,4254,4255],"class_list":["post-58669","post","type-post","status-publish","format-standard","hentry","category-economics","tag-inventories","tag-shortages","tag-supply-and-demand","tag-supply-chains","tag-wolf-richter","tag-wolfstreet"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/58669","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=58669"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/58669\/revisions"}],"predecessor-version":[{"id":58670,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/58669\/revisions\/58670"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=58669"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=58669"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=58669"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}