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What Are Business Inventories? Definition and Importance

What Are Business Inventories?Business inventories are an economic indicator that focuses on the total of inventories at each of the three stages of production:…



Business inventories show how much merchandise remains to be sold and are considered a leading indicator to gauge future economic conditions.


What Are Business Inventories?

Business inventories are an economic indicator that focuses on the total of inventories at each of the three stages of production: manufacturing, wholesale, and retail. The report on business inventories also includes business sales, which are the total of sales at each of the three stages of production. Inventories include raw materials such as iron and wood, works in progress such as clothing pieces yet to be sewn, and finished products such as radios and cars.

Business inventories and sales are expressed in dollars for the reporting period, but investors and analysts tend to focus on the month-on-month percent change and the monthly year-on-year percent change.

The inventories-to-sales ratio is a metric that is also published with business inventories and sales, and that is calculated by dividing inventories by sales.

Why Are Business Inventories Important?

The data are widely followed by economists, investors, and analysts, and by organizations ranging from the Federal Reserve to institutional investment firms and banks in the analysis and forecasting of future economic conditions. Business inventories are viewed as a leading indicator in terms of measuring future commitments in the manufacturing sector and how consumers might be spending their money.

High inventory levels, for example, can be interpreted in two ways: that manufacturers are producing more and have enough goods to meet expected demand, or that consumer demand is weak and there are too many goods being left unsold. The latter could point to signs of recession.

Either way, much like retail sales, same-store sales, and auto sales, it’s a way to gauge the potential behavior of consumer spending.

When Are Business Inventories Released?

The Census Bureau of the U.S. Department of Commerce releases the data at the middle of the month, at 10 a.m. ET. The report’s official title is the Manufacturing and Trade Inventories and Sales Report. The report is based on the month two months prior to the release month because it takes about six weeks to compile the data.

Upcoming Release Dates in 2022

How Are Business Inventories Compiled?

The estimates for business inventories are based on data from three surveys: the Monthly Retail Trade Survey, the Monthly Wholesale Trade Survey, and the Manufacturers’ Shipments, Inventories, and Orders Survey. The manufacturers survey focuses on companies with $500 million or more in annual shipments, though the Census Bureau does get results from smaller companies.

The figures are adjusted for seasonal and trading day differences but not for price changes.

What Is the Inventories-to-Sales Ratio?

The ratio shows the relationship of the values of inventory to sales each month. A ratio of 1 indicates that there is enough merchandise available to cover one month of sales, while a ratio of 1.5 means one-and-a-half months, 2 for two months, and so on. The ratio may indicate whether the pace of inventories may either slow or accelerate over a period. A higher ratio, for example, might mean manufacturers will consider slowing down production to keep inventories at a minimum.

How to Interpret Business Inventories

Below are graphs of business inventories and the inventories-to-sales ratio, with periods of recession.

Business inventories have been on a constant rise in the past two decades to 2022.

Federal Reserve data via Google Sheets

The inventories-to-sales ratio spiked in 2020 at the start of the COVID-19 pandemic.

Federal Reserve data via Google Sheets

Just as business inventories peaked in 2001, 2008 and 2020, the economy slipped into recession. On the other hand, the inventories-to-sales ratio rose in 2008 and 2020 at the tail end of each recession. The ratio spiked in 2020 as consumers withheld purchases at the start of the COVID-19 pandemic.

As inventories climb in early 2022, other indicators point to the economy slipping into recession.

How Do the Stock and Bond Markets React to Business Inventories?

High values in business inventories could mean that manufacturers are doing well to produce their goods. On the other hand, high inventory levels over a sustained period could indicate that consumer demand is weak and suggest that the economy could be heading into recession. In reaction to that scenario, stock prices, especially for businesses engaged in manufacturing, could decline. Bond prices could also fall if business inventories point to the potential of the economy contracting.

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Spread & Containment

Many CDC Blunders Exaggerated Severity Of COVID-19: Study

Many CDC Blunders Exaggerated Severity Of COVID-19: Study

Authored by Zachary Stieber via The Epoch Times (emphasis ours),

The U.S. Centers…



Many CDC Blunders Exaggerated Severity Of COVID-19: Study

Authored by Zachary Stieber via The Epoch Times (emphasis ours),

The U.S. Centers for Disease Control and Prevention (CDC) made at least 25 statistical or numerical errors during the COVID-19 pandemic, and the overwhelming majority exaggerated the severity of the pandemic, according to a new study.

Researchers who have been tracking CDC errors compiled 25 instances where the agency offered demonstrably false information. For each instance, they analyzed whether the error exaggerated or downplayed the severity of COVID-19.

Of the 25 instances, 20 exaggerated the severity, the researchers reported in the study, which was published ahead of peer review on March 23.

The CDC has expressed significant concern about COVID-19 misinformation. In order for the CDC to be a credible source of information, they must improve the accuracy of the data they provide,” the authors wrote.

The CDC did not respond to a request for comment.

Most Errors Involved Children

Most of the errors were about COVID-19’s impact on children.

In mid-2021, for instance, the CDC claimed that 4 percent of the deaths attributed to COVID-19 were kids. The actual percentage was 0.04 percent. The CDC eventually corrected the misinformation, months after being alerted to the issue.

CDC Director Dr. Rochelle Walensky falsely told a White House press briefing in October 2021 that there had been 745 COVID-19 deaths in children, but the actual number, based on CDC death certificate analysis, was 558.

Walensky and other CDC officials also falsely said in 2022 that COVID-19 was a top five cause of death for children, citing a study that gathered CDC data instead of looking at the data directly. The officials have not corrected the false claims.

Other errors include the CDC claiming in 2022 that pediatric COVID-19 hospitalizations were “increasing again” when they’d actually peaked two weeks earlier; CDC officials in 2023 including deaths among infants younger than 6 months old when reporting COVID-19 deaths among children; and Walensky on Feb. 9, 2023, exaggerating the pediatric death toll before Congress.

“These errors suggest the CDC consistently exaggerates the impact of COVID-19 on children,” the authors of the study said.

Read more here...

Tyler Durden Fri, 03/24/2023 - 20:20

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Southwest Airlines Has a New Way To Fix Boarding Process Problem

The company has a novel way to end a practice that passengers hate.



The company has a novel way to end a practice that passengers hate.

Southwest Airlines boards its planes in a way very different from that of any of its major rivals.

As fans and detractors of the brand know, the airline does not offer seat assignments. Instead, passengers board by group and number. When you check into your flight, Southwest assigns you to the A, B, or C boarding groups and gives you a number 1-60. The A group boards first in numerical order.

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In theory, people board in the assigned order and can claim any seat that's available. In practice, the airline's boarding process leaves a lot of gray area that some people exploit. Others simply don't know exactly what the rules are.

If, for example, you are traveling with a friend who has a much later boarding number, is it okay to save a middle seat for that person?

Generally, that's okay because middle seats are less desirable, but technically it's not allowed. In general practice, if you move into the second half of the plane, no passenger will fight for a specific middle seat, but toward the front some may claim a middle seat.

There's less grey area, however, when it comes to trying to keep people from sitting in unoccupied seats. That's a huge problem for the airline, one that Southwest has tried to address in a humorous way.

A Southwest Airlines plane is in the air. 

Image source: Shutterstock

Southwest Airlines Has a Boarding Problem

When Southwest boards its flights it generally communicates to passengers about how full it expects the plane to be. In very rare cases, the airline will tell passengers when the crowd is small and they can expect that nobody will have to sit in a middle seat.

In most cases, however, at least since air travel has recovered after the covid pandemic, the airline usually announces that the flight is full or nearly full as passengers board. That's a de facto (and sometimes explicit) call not to attempt to discourage people from taking open seats in your row.

Unfortunately, many passengers know that sometimes when the airline says a flight is full, that's not entirely true. There might be a few no shows or a few seats that end up being open for one reason or another.

That leads to passengers -- at least a few of them on nearly every flight -- going to great lengths to try to end up next to an empty seat. Southwest has tried lots of different ways to discourage this behavior and has now resorted to humor in an effort to stop the seat hogs.

Southwest Uses Humor to Address a Pain Point

The airline recently released a video that addressed what it called "discouraged but crafty strategies to get a row to yourself" on Southwest. The video shows a man demonstrating all the different ways people try to dissuade other passengers from taking the open seats in their row.

These include, but are not limited to:

  • Laying out across the whole row.   
  • Holding your arm up to sort of block the seats.
  • Being too encouraging about someone taking the seat.
  • Actually saying no when someone asks if they can have an open seat. 

The airline also detailed a scenario it called "the fake breakup," where the person in the seat holds a loud phone conversation where he pretends he's being broken up with.

That one seems a bit of a reach, especially when Southwest left the most common seat-saving tactic out of its video -- simply putting some of your stuff in the open seat to make it appear unavailable.

Related Link:

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NIH awards researchers $7.5 million to create data support center for opioid use disorder and pain management research

WINSTON-SALEM, N.C. – March 24, 2023 – Researchers at Wake Forest University School of Medicine have been awarded a five-year, $7.5 million grant…



WINSTON-SALEM, N.C. – March 24, 2023 – Researchers at Wake Forest University School of Medicine have been awarded a five-year, $7.5 million grant from the National Institutes of Health (NIH) Helping End Addiction Long-term (HEAL) initiative.

Credit: Wake Forest University School of Medicine

WINSTON-SALEM, N.C. – March 24, 2023 – Researchers at Wake Forest University School of Medicine have been awarded a five-year, $7.5 million grant from the National Institutes of Health (NIH) Helping End Addiction Long-term (HEAL) initiative.

The NIH HEAL initiative, which launched in 2018, was created to find scientific solutions to stem the national opioid and pain public health crises. The funding is part of the HEAL Data 2 Action (HD2A) program, designed to use real-time data to guide actions and change processes toward reducing overdoses and improving opioid use disorder treatment and pain management.

With the support of the grant, researchers will create a data infrastructure support center to assist HD2A innovation projects at other institutions across the country. These innovation projects are designed to address gaps in four areas—prevention, harm reduction, treatment of opioid use disorder and recovery support.

“Our center’s goal is to remove barriers so that solutions can be more streamlined and rapidly distributed,” said Meredith C.B. Adams, M.D., associate professor of anesthesiology, biomedical informatics, physiology and pharmacology, and public health sciences at Wake Forest University School of Medicine.

By monitoring opioid overdoses in real time, researchers will be able to identify trends and gaps in resources in local communities where services are most needed.

“We will collect and analyze data that will inform prevention and treatment services,” Adams said. “We’re shifting chronic pain and opioid care in communities to quickly offer solutions.”

The center will also develop data related resources, education and training related to substance use, pain management and the reduction of opioid overdoses.

According to the CDC, there was a 29% increase in drug overdose deaths in the U.S.  in 2020, and nearly 75% of those deaths involved an opioid.

“Given the scope of the opioid crises, which was only exacerbated by the COVID-19 pandemic, it’s imperative that we improve and create new prevention strategies,” Adams said. “The funding will create the infrastructure for rapid intervention.”

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