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About Those Scary High Auto Inventories: The Fed Disagrees

There have been many articles in recent months about scary high inventories of US autos. Today the Fed released its auto inventory to sales ratio for December: 2.76.

As you can see, it's high -- but not unusually so. It's not recessionary high (it's not a leading indicator). It is, however, high enough to cause problems if the economy slows in the first half of 2016.

FRED: auto inventory to sales ratio thru December 2016

The exaggerations about auto inventories are another example of the exaggerated reporting about the weakening US economy. Do not let the perma-bears make you panic. There are many warning signs. Watch the data.

I suggest caution, and incremental risk reduction as (or if) bad news continues to come.

For More Information

See these articles at Seeking Alpha about the US economy...

  1. How To Spot A 2016 Recession While On The Horizon, And Prepare For It.
  2. The Government Has A Clip Full Of Bullets To Fight The Next Recession.
  3. Effects Of The Coming Market Crash On The Economy - And Perhaps On You.
  4. Playing The Bubble Game: Investing In The 21st Century.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.