Two more reports from last week that we want to look at were on December sales and inventories for different sectors of the economy. We want to know how they might affect 4th quarter GDP revisions. Here's a simplistic way to think about how sales and inventories in the economy affect GDP: If the economy consumes 10 apples at a dollar a piece in November, and 11 apples at 90 cents each in December, sales have gone down by 1% in December but monthly GDP is up 10%. If there are 10 apples left on the shelf in both months, reported inventories will go down 10% in December, but
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