QI TAKEAWAY — The downside surprise in November Wholesale Sales dragged down the five-month annualized decline to -4.8%, a recessionary read. The signal is much clearer given the 89% five-month increase in continuing claims in the wholesale sector. At some point, the aggregate of data, with the sole exception of the unemployment rate, will be too difficult for even the staunchest “soft landing” acolytes to dismiss.
- November Wholesale Sales came in at -0.6% MoM vs. the +0.2% consensus, while October was revised down from 0.4% to 0.0%; all three components of Business Sales, Wholesale, Manufacturing, and Retail, fell MoM, which has occurred just 9% of the time since 1967
- On a 5-month annualized basis, Wholesale Sales fell 4.8% in November, on par with recessionary levels seen in 1973-75, 1981-82, 1990-91, 2001, and the GFC; while it is not a direct contributor to GDP, at 37.7%, Wholesale makes up the largest share of Business Sales
- After troughing in June at 31,000, coinciding with Wholesale Sales’ peak, continuing claims in Wholesale Trade nearly doubled to 59,000 in November; the 89% increase in five months is a red flag for the “soft landing” camp, who have ever less data to back up their position