Insufficient Inventories

In a sign of how strong demand is and weak supply is, the retail inventories-to-sales ratio is an astonishingly low 1.07, its lowest level since record-keeping began in 1/92. It’s also much lower than the previous low of 1.34 set in 2011/2012. Additionally, factory capacity utilization is just 75.2%, well below the decade-high of 79.9% set in 8/18 and the soft pre-covid level of 76.3%. We simply can’t produce enough.