The typical manufacturer reaction when inventories get out of hand is to cut production and layoff workers. When the problem occurs at the wholesaler level, there may be a lapse before manufacturers understand what it happening. However, when good pile up, wherever it happens, the results are the same.
August saw wholesaler sales increase, but inventories increase faster. That’s been a consistent pattern for 2018 and its a threat to the economy in the near future.
- US Census Bureau, “Monthly Wholesale Trade,” press release 10/10/2018 10:00 AM EDT