Posted by Joseph Y. Calhoun, III

Inventories were down again in September:

Sales. The U.S. Census Bureau announced today that the combined value of distributive trade sales and manufacturers’ shipments for September, adjusted for seasonal and trading-day differences but not for price changes, was estimated at $988.1 billion, down 0.3 percent (±0.3%)* from August 2009 and down 13.1 percent (±0.6%) from September 2008.

Inventories. Manufacturers’ and trade inventories, adjusted for seasonal variations but not for price changes, were estimated at an end-of-month level of $1,303.3 billion, down 0.4 percent (±0.1%) from August 2009 and down 13.4 percent (±0.3%) from September 2008.

Inventories/Sales Ratio. The total business inventories/sales ratio based on seasonally adjusted data at the end of September was 1.32. The September 2008 ratio was 1.32.

The inventory to sales ratio still needs to fall further before we see a sustained rise in production.