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Karim writes:

Inventory rebuild in full swing—gap between orders and inventories at 34yr high; Timing of CARS definitely a factor but inventory rebuild more broadly to contribute anywhere from 2-3% to GDP gwth in H2.

Employment reading still weak and outlook for final demand still poor due to employment, wealth, and income factors.

And subsequent release of car sales numbers weaker than expected.

  • “Production is picking up as demand [for] orders is being accelerated.” (Nonmetallic Mineral Products)
  • “Demand from automotive manufacturers increasing thanks to ‘Cash for Clunkers.'” (Fabricated Metal Products)
  • “In addition to improved business come the complications of a supply chain drained of inventory.” (Paper Products)
  • “The sudden increase in customer demand, plus the low inventories held at services centers, is causing a shortage in the supply of raw steel.” (Transportation Equipment)
  • “[It] appears customers’ inventories are getting low, and they are cautiously placing orders.” (Apparel, Leather & Allied Products)

August July
Overall 52.9 48.9
Prices paid 65.0 55.0

This did not take long to reverse, helped by the weaker dollar.

Production 61.9 57.9
New Orders 64.9 55.3
Inventories 34.4 33.5
Employment 46.4 45.6
Export Orders 55.5 50.5

Exports up and imports down as real terms of trade continue to weaken.

Imports 49.5 50.0