Release Explanation: This report measures the value of goods held by Wholesalers, or Business's, and the value of those Sales when they leave the Shelf. If inventories build it normally means that the economy is slowing. Factory Orders, Durable Goods, Retail Sales are all affected by this report. A currency will eventually be affected by these numbers, but only once they filter through to the main releases.
Trade Desk Thoughts: According to a report released today by the Census Bureau, manufacturers' and trade inventories, adjusted for seasonal variations but not for price changes, were estimated to be $1.485 trillion in November 2008, down 0.7% from October 2008, but up 3.3% from November 2007. The total business inventories/sales ratio based on seasonally adjusted data at the end of November was 1.41. The November 2007 ratio was 1.24.
The 13.7% increase in the inventory to sales ratio indicates sales are slowing faster than businesses can reduce inventories, said Matthew Carniol, chief currency strategist at TheLFB.forex.com. It's another conformation the economy slowed sharply in the fourth quarter. GDP could decline as much as 6% annualized for the period.
The report also said the combined value of trade sales and manufacturers' shipments for November was estimated at $1.057 trillion, down 5.1% from October 2008 and down 8.9% from November 2007.
Forex Technical Reaction: U.S. equity markets were recently down over 3% on the day and the dollar just declined to 89 yen.