Graph of the Day: Manufacturers’ and Trade Inventories, 1993-2009
From Calculated Risk: 
This graph is based on the Manufacturing and Trade Inventories and Sales report from the Census Bureau. This shows the 3 month change (annualized) in manufacturers’ and trade inventories. The inventory correction was slow to start in this recession, but inventories are now declining sharply. This change in inventories will probably have a significant impact on GDP for the next few quarters. This is common in a recession. The contribution of changes in inventory to GDP have been pretty wild at times – in the early ’80s there were a few quarters where the change in inventory subtracted more than 5% from GDP (annualized) in just one quarter! Something like that could happen in Q1 or Q2 too – and this is difficult to predict – and that could contribute to a horrible GDP number in Q1. …
