Inimical Inventories

inventory January through June 2016 GDP growth was a dismal 1% on an annualized basis. A key culprit, inventories sliced 1.2 percentage points off GDP in Q2 and have now subtracted from GDP growth for 5 straight quarters, the first time this has happened since 1957. Inventories have never declined for six quarters in a row. This suggests GDP growth during the rest of 2016 should rise. 2.2% is my forecast.

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