Manufacturing and trade sales drop 0.6% in June

posted at 11:36 am on August 13, 2010 by Ed Morrissey

The question won’t be whether the August 27th revision announcement for Q2 GDP brings a significant drop; it’s just how far it will fall after final June numbers get calculated into the analysis.  The latest from manufacturing and trade sales suggests that the revision may be even sharper than first thought.  Commerce announced a 0.6% decline in this economic indicator — and that business inventories grew:

Sales. The U.S. Census Bureau announced today that the combined value of distributive trade sales and manufacturers’ shipments for June, adjusted for seasonal and trading-day differences but not for price changes, was estimated at $1,080.5 billion, down 0.6 percent (±0.2%) from May 2010, but up 9.2 percent (±0.5%) from June 2009.

Inventories. Manufacturers’ and trade inventories, adjusted for seasonal variations but not for price changes, were estimated at an end-of-month level of $1,359.9 billion, up 0.3 percent (±0.1%) from May 2010 and up 0.2 percent (±0.4%)* from June 2009.

We already knew from earlier indicators that manufacturing slowed in May and June, but this shows the extent of the decline.  The previous metric focused on orders rather than sales and shipments, which gives a better indication of future direction — and that fell 1.2% in June. With business inventories climbing, it explains why orders fell more sharply and emphasizes the fact that it may be a while before manufacturing demand increases.

Sales fell across all categories, according to Commerce:

  • Manufacturers: -0.8%
  • Retailers: -0.3%
  • Merchant wholesalers: -0.7%

Retail inventories grew 0.8% in June from May, and perhaps most gloomily, 0.2% from last June.  They also grew 0.5% in May, which means that retail demand has fallen short of expectations from the spring, and inventory won’t need to be replaced as quickly.  It’s another reason why orders are down and probably will remain down, especially after noting the disappointing advance retail numbers from July.

These numbers will get factored into the Q2 GDP revision.  JP Morgan had warned that the revised number could fall below 1% if the sales figures from June didn’t provide enough of a boost to offset other bad numbers in exports and other areas.  This doesn’t appear to be a reason to expect a better revision than JPM assumed earlier in the week, although it’s hard to know whether the bad news exceeded the assumptions of Commerce in the advance GDP figure.

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And the hits just keep on coming…..

How much more of this can the country take.

oh yeah, I BLAME BUSH!!! /s

Yakko77 on August 13, 2010 at 11:38 AM

Why do you hate America, Ed?

Good Lt on August 13, 2010 at 11:39 AM

How will this be spun as good for Obama?

zmdavid on August 13, 2010 at 11:40 AM

Ya know,with this Inheritance Hopey brags about,
in less than two years,he sure has spent it away,
and F”ked it up!!

Jus sayin!!!!!!!!!!!!!!!!

canopfor on August 13, 2010 at 11:42 AM

Where’s the “unexpectedly“?

LASue on August 13, 2010 at 11:43 AM

Count it!

lorien1973 on August 13, 2010 at 11:43 AM

We built more survival shelters – that’ll help.

Fuquay Steve on August 13, 2010 at 11:43 AM

We sold more gums and ammo sales are through the roof – that’ll help

Fuquay Steve on August 13, 2010 at 11:44 AM

This makes the July numbers look even better!

/mfm

The Mega Independent on August 13, 2010 at 11:45 AM

I’m saving up for a $41,000 teeny, tiny vehicle that goes 40 miles.- That hurts.

Fuquay Steve on August 13, 2010 at 11:45 AM

I blame global warming.

year_of_the_dingo on August 13, 2010 at 11:47 AM

Obama’s America

Inanemergencydial on August 13, 2010 at 11:47 AM

Remember how the MFM talked down the economy during the Bush years? All bad news, all the time. Even with unemployment at under 5%, and other economic indicators on the upswing.

Now they spend their days talking up the economy in spite of all the negative numbers.

Then, with a surprised look on their stupid faces, they wonder why their product doesn’t sell. Readership and revenue following the same trend lines as their Hero. Down.

GarandFan on August 13, 2010 at 11:48 AM

Recovery Bummer rolls on and on…

Soon we will be in the Falling Expectations.

ajacksonian on August 13, 2010 at 11:48 AM

So,its another loud s-c-r-e-e-t-c-h from the Titanic’s
hull,after Team Liberal smacks another iceberg!!

canopfor on August 13, 2010 at 11:49 AM

More proof that we never left the “L” shaped re3cession! Japan’s lost decade here we come!!!!Socialism FTW dude!

abobo on August 13, 2010 at 11:51 AM

I’m saving up for a $41,000 teeny, tiny vehicle that goes 40 miles.- That hurts.

Fuquay Steve on August 13, 2010 at 11:45 AM

Fuquay Steve: Thats the spirit,haha(sarc),ahem!:)

canopfor on August 13, 2010 at 11:52 AM

This is really one of those flashing amber signs talked about in this article today in the WSJ I keep glancing at the stock market nervously lately. Anytime it drops more than a few points I wonder if today is the day, if this bit or that bit of news is the straw that breaks the camels back. It’s really sort of sad.

WashingtonsWake on August 13, 2010 at 11:53 AM

We are going BACKACKWARDS in order to go FORWARDS!

===================signed, Taxist/Spendist/Idiotists,
Team HopeLess/ChangeLess

canopfor on August 13, 2010 at 11:55 AM

OK, America! Let’s see Keith Olbermann, Chris Matthews, and the rest of the MSNBC Insane Asylum try to put any sort of a “Future’s So Bright, We Gotta Wear Shades!” spin on this one!

pilamaye on August 13, 2010 at 11:59 AM

Turbo Tim and his pal Larry plan to bring us more of this.

Team Zero. Heroes of the totally clueless.

dogsoldier on August 13, 2010 at 12:05 PM

We’re going full circle!

moonsbreath on August 13, 2010 at 12:06 PM

Cue the “Cruel Summer” soundtrack.

elderberry on August 13, 2010 at 12:07 PM

Watch for all the economic data from now until the election to be faked, and then ‘adjusted’ after the election. This will include unemployment obviously. Bammie will do anything he can to keep from displaying two digits.

slickwillie2001 on August 13, 2010 at 12:16 PM

The Luddites are running the country!

Sandybourne on August 13, 2010 at 12:19 PM

Watch for all the economic data from now until the election to be faked …. slickwillie2001 on August 13, 2010 at 12:16 PM

Hmmm, I think, if it were in his power, I’d agree. But I’m not sure he has tight enough control of all the reporting — YET.

My guess is, if there is any sort of sharp downturn, he won’t be able to completely hide it or keep that number out of double digits.

WashingtonsWake on August 13, 2010 at 12:26 PM

After all this rescuing of the economy, it’s no wonder Obama needs (yet another) vacation.

pain train on August 13, 2010 at 12:30 PM

In fact, to point back to the article I linked to earlier, there are just so many negative indicators and so many of them out of his control, I think this strange seeming-death-spiral of the democrat party might intensify significantly as the campaigns heat up and create dozens of outbreaks of uncontrolled truth. The last thing the democrats can handle at this point are the facts, but even the media is having trouble keeping up with the feces smeared all over our economy. IF, for even a single day, DOW becomes overwhelmingly negative – the democrats face a meltdown of unprecedented scale. They own this economy now, and the closer people look at it, the more they own it. The ability of republicans to point at the old “Party of No” democrats that shot down Soc Sec reform, and Fannie/Freddy GSE reform will not be brushed away again so easily. The fact that at least 2 budgets before the last meltdown were theirs hurts them even more. There are real reasons for them to be grim, and there is actual reason for Obama to be afraid.

WashingtonsWake on August 13, 2010 at 12:31 PM

Until we dispose of this “president” who has explicitly promised that he will bankrupt certain industries, nationalize others, and cause energy costs to “necessarily skyrocket,” we are NEVER going to see any kind of recovery.

UltimateBob on August 13, 2010 at 12:37 PM

Cue the “Cruel Summer” soundtrack.

elderberry on August 13, 2010 at 12:07 PM

elderberry: If you insist!
======================================================
Bananarama – Cruel Summer (HD)

http://www.youtube.com/watch?v=MPNhV1gF008

canopfor on August 13, 2010 at 12:39 PM

I wonder if the creative destruction of capitalism might have been preferable to the hack Democratic spending spree and the legislative games of the lightweight gang at the WH who have no clue what they are doing.

I have a feeling that if the economy recovers it will be in spite of, and not due to, the actions of our elected idiots.

I just read a nice treatise on this, as a matter of fact.

IlikedAUH2O on August 13, 2010 at 12:46 PM

Bush appears on the news welcoming back soldiers and then just a few days later, we have a poor manufacturing and trade sales report.

Coincidence? I think not!

PackerBronco on August 13, 2010 at 12:52 PM

I have a feeling that if the economy recovers it will be in spite of, and not due to, the actions of our elected idiots.

That is a universal truth. However, one major action our elected leaders can take is to get out of the way…get the government out of the way, and we’ll do the rest.

JonPrichard on August 13, 2010 at 12:55 PM

The scary thing to me is that even if we manage to win a lot of seats in the mid-terms, and maybe even the presidency after that, I don’t know that new leaders have any idea how to get out of this mess any more than the current ones do.

scalleywag on August 13, 2010 at 1:05 PM

Teh Won has a plan to double our exports — next he will send MAO to France for a week, thereby doubling Michelle exports for the year.

GnuBreed on August 13, 2010 at 1:09 PM

I don’t know that new leaders have any idea how to get out of this mess any more than the current ones do.
scalleywag on August 13, 2010 at 1:05 PM

But perhaps they’d try trusting Americans- perhaps they’d get out of the way? It’s a long shot, but it’s better than any other shot we’ve got.

WashingtonsWake on August 13, 2010 at 2:17 PM