Inventory levels (aka unsold goods) across the US Economy have skyrocketed over the last two years. Particularly among Corporate Retailers (Walmart, Target, Home Depot) as well as Home Builders in the US Housing Market.
These higher Business and Real Estate Inventories could turn America’s Inflation Problem into a Deflationary Crash by the end of 2022. And push the US Housing Bubble into a Housing Crash. The result would be that the prices of Appliances, Electronics, Furniture, and Real Estate decline.
Especially if Consumer Demand goes down. The US Consumer is being squeezed by a combination of high inflation and rising interest rates. The result is that the Personal Savings Rate just declined to nearly an all-time low in April 2022. If this trend continues Consumer will likely “tap out” and spend less money. Thereby creating a Recession and releasing the onslaught of backlogged inventory – an associated Deflation Discounts – into in the Market.
It’s interesting how the behavior of Retailers such as Home Depot and Home Builders is so similar. Both are ordering and building too many physical goods right, with minimal consideration that consumer demand is declining.
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#Inventory #Deflation