Inventories Look Lean

The inventory and sales report on American business shows that inventories are lean.  This usually means that production will be increased to restock shelves.

But look at the longer-run trend:

For over a decade, we’ve had a steep decline in inventory-sales ratios.  What we’re seeing now is not a  short-term cyclical change that tells us business production will increase next quarters.  Instead, we’re seeing the overall economy shift into lean mode.

Business implication: get lean.  In my forthcoming book, Businomics, I emphasize the riskiness of inventories.  First get lean, then buy the book.