INVENTORY INDICATOR

The business sector has been liquidating physical inventories for five straight quarters. If companies were expecting future inflation, they would be building inventories to avert further cost increases —not to mention capturing the IVA revaluation in earnings. Conversely, in 2021 and 2022, corporations sharply boosted inventories for six straight quarters. That should have been a cue at the time that the inflation burst was not destined to be “transitory”.