My take on this is a bit different. I think businesses are anticipating a slowdown and cutting inventory ahead of it.
“Davidson” submits:
Reported this morning with August Retail Sales is data on Inventory/Sales ratio from July. While a lagging indicator and not historically a good indicator of future economic activity, the July 2020 report emerges as underscoring a unique forecast for accelerated future economic activity. Total Business Inventories are reported at historic lows of 1.23, only slightly above the June level of 1.22. Both long-term and short-term histories are presented of Total Business, Retail and Manufacturing Inventory/Sales Ratios. There are other sectors not shown.
The history of these indicators reflect improvement in business efficiencies with ‘just-in-time’ manufacturing and transport (taking out costs to hold inventory) with a significant decline in the Total Ratio from 1992’s 1.70 avg to 2012’s level of 1.34. The rise in the US$ which began in late-2011 and continued in 2014 with Russia’s invasion of Ukraine resulted in slower exports and a rise in inventories. Even with these machinations, July’s 1.23 is at record lows. A certain level of inventory is required for business efficiency. Replenishment of inventories to recover to pre-COVID-19 levels will act as a stimulus future economic activity.
