Here’s Where the Inventory Shortages Are, and Where Retailers Are Overstocked, by Retailer Category

It’s still supply-chain chaos for retailers, but different retailers face different kinds of chaos.

By Wolf Richter for WOLF STREET.

There are now stories out there about retailers suddenly being “overstocked,” and the shortages having turned into gluts, and suddenly folks are already seeing that the supply chains got fixed miraculously or whatever. But overall inventories at retailers remain very low, and at the biggest category of retailers – auto dealers – inventories are desperately low, and they’re low at other retailer categories, but general merchandise retailers, such as Walmart and Target, are suddenly awash in some types of merchandise.

What happened at these general merchandise retailers, and some others, is that eternally long lead-times and snags and chaos have delayed goods, and when they finally got there, the consumers had moved on to other things. And these retailers ran out of the stuff the consumers had moved onto, and were overstocked with the stuff consumers were no longer interested in.

Overall retailer inventories, in terms of months’ supply, are still near historic lows.

Having the wrong inventory on hand is a classic retailer problem. To minimize that risk, retailers have shortened their supply chains and they delay major product decisions until the last moment. And then the pandemic hit, and that solution became a huge problem, and retailers had to adjust on the fly. And some retailer categories got caught wrong-footed and are overstocked, while many other retailer categories have very tight inventories or shortages, including the largest category of retailer — auto dealers —  which are still out of inventory. The overall inventory-sales ratio – or months’ supply – at retailers has improved only slightly to 1.18 months’ supply:

Inventories in dollars = raging cost inflation, not rising inventories.

Inflation in goods – which is what retailers sell – has been far higher than overall CPI. For example, used vehicles wholesale prices, which become the cost in inventory for dealers, spiked by 35% to 45% year-over-year between October last year and February this year. These cost increases have ballooned the inventories in dollars, though used vehicle inventories in terms of vehicles remain tight and actually declined over the past three months.

What matters: months’ supply.

To exclude the impact of the surging costs of goods, and to get a feel for what actual inventory levels are in relationship to sales, we look at the “inventory-sales ratio,” which is a classic industry metric that shows how many months it takes to sell the inventory on hand at the end of the month at the current rate of sales.

Last week, the Census Bureau released the retail inventory data through April. The end of April is also when the fiscal Q1 of most retailers ends including Walmart and Target.

We’re going to look at it by category of retailer, because they’re big differences.

At auto dealers, the largest category of retailer, which in normal times account for over 35% of total retail inventories, inventories remain desperately low, at 1.28 months’ supply, down from roughly 2.2 to 2.4 months’ supply before the pandemic. And they have hardly made any progress at all:

Auto dealers are now struggling with another issue: Pickup trucks and large SUVs were all the rage in 2020 and 2021 and earlier in 2022, and no one had any in stock due to the semiconductor shortages. Automakers prioritized production of these vehicles because they’re far more expensive and profitable than smaller vehicles, and if they can build only a limited number of vehicles due to the semiconductor shortages, they’d build the most expensive and most profitable ones to maximize their revenues and profits – which they did.

Then gasoline prices began to spike earlier this year, and suddenly consumers were chasing down more economical cars and compact SUVs and hybrids, and now dealers are out of them, they’re just about all gone from inventories, while pickup trucks are starting to accumulate at some brands. But overall new vehicle inventories remain desperately low.

The number of new vehicles at dealer lots, according to data from Cox Automotive, has plunged by 70% from 2019, to just 1.13 million vehicles at the end of May. Many models, especially now more economical vehicles, have essentially vanished from inventory.

The number of used vehicles at dealer lots, at 2.47 million vehicles is tight and below pre-pandemic levels, but there is sufficient supply for the lower sales rates currently, which are kept down by a partial buyers’ strike against these sky-high prices:

At food and beverage stores, supply is nearly back to pre-pandemic levels, at 0.78 months, which is a good thing:

At building materials and garden supply retailers, supply is now back at the upper end of the pre-pandemic normal range, at 1.87 months, same as in April and May 2019:

At clothing and accessory stores, inventory has been improving from the desperate levels last year. The current supply of 2.12 months is about 13% below where it had been during the same period in 2019:

At general merchandise stores, which account for about 12% of total retail inventory and include Walmart and Target, inventories have risen sharply, as their merchandise has finally arrived. Meanwhile, consumers shifted their spending to services such as travel and dentists and entertainment events, and to items that those stores were suddenly out of, and so now there are rich levels of supply, but some of it is the wrong stuff, with shortages in the right stuff. The supply of 1.58 months was the highest since 2007:


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  132 comments for “Here’s Where the Inventory Shortages Are, and Where Retailers Are Overstocked, by Retailer Category

  1. CreditGB says:

    I have no data, but for used lawn and garden tractors, normally a pretty high level of inventory had existed. Today my dealer, a regional major brand name, with 11 dealerships selling green and yellow machines has a total of 7 used lawn and garden tractors across their entire 11 dealerships. Three of these are competing brands of L&G tractors.
    Just saying….

    • Nemo 300 BLK says:

      I live in a rural area, and HD, Lowes, and Tractor Supply all have plenty of throwaway lawn tractors and cheap zero turns.

      When it comes to $10K commercial zero turns, $18K subcompact diesel tractors, mid-size diesel tractors, skid steers, and excavators, three different dealers within 25 miles of here have very little inventory. This includes Deere and Kubota.

      As I’ve mentioned before, they still can’t build custom homes fast enough here and there’s a lot of farming.

      • TheRealMRDyno says:

        What’s a throwaway mower?

        Anything other than commercial?

        This kind of comment bugs me, because we sell end of line test equipment to lots of places, including residential and commercial mower companies, and I know the level of effort that goes into testing all of them.

        My personal throwaway Craftsman mower has required one fuel filter, two sets of blades, and soon one seat and front tires, in 18 years. My own driving has been a little careless, so it has taken a few hard shots, requiring straightening of the tie rods.

        Maybe what we have is throughway purchasers,

        • Anthony A. says:

          “Maybe what we have is throughway purchasers”

          This ^^^^

          My throwaway Craftsman mower, bought used 15 years ago, still starts on the first pull and I did change the blade once since I bought it. I do change the oil yearly. Oh, I wash it annually too.

        • TK says:

          Agreed, my cheap tractor mower lasted almost 20 years. Just the base model at HD way back when. Just maintain it well, filters, oil blades and I had a belt break. But for a tool that makes a lot of dust and vibration, it was fine. Kind of like telling the BMW owners that my Honda was a better buy. Some things are priced high to induce us to naively buy what we percieve to be the best. But a mower is just a tool and we should always consider the cost/benefit. We have someone cut the lawn now. I like the kid with a beat up pickup and an old mower. The flashy landscapers charge too much.

        • All Good Here Mate says:

          Gonna have to disagree with you there, Bob. Depot / Lowe’s / Walmart / et. all sell throw-away junk. Anyone who has been near a commercial machine of any consequence can immediately tell just how inferior and poorly made that stuff is. No offense, but just one set of blades in 18-years tells me you either live on the tundra or haven’t used your throw-away mower very much.

        • El Katz says:

          Most people don’t maintain their garden equipment. Those that do can get reasonable service from even the cheapest product. Those that don’t, throw them away and simply buy another. How many mowers do you see stored out of doors?

          I had a Honda mower for 22 years. AFAIK, it’s still running. Original spark plug. Replaced the bag a few times and always bought new blades to make sure they maintained their balance and didn’t trash the bearings on the deck. I think I paid $4 each for the blades – OEM. Scraped the aluminum deck once a year – whether it needed it or not :-/.

          I have a string trimmer in the garage. Also a Honda. I bought it used in 1998 and it still starts on the second pull with it’s original plug. The key is to drain the gas at the end of the season. Run premium. Change the oil when it’s foul (4 cycle weed whip). Put Stabil in the gas can. Rotate the fuel supply (I dump whatever’s left at the end of the season in my car and refill).

        • Brant Lee says:

          The police in my area call the Dodge Chargers throw-away squad cars. They’re good for a couple of years, used up and then practically worthless to anyone afterward.

        • random guy 62 says:

          Sorry to zoom in on this, but that’s complete nonsense.

          Product quality is engineered to target different buyer segments, use cases, distribution strategies, geography, and price points.. among other things. Some products land spot-on in terms of price/quality trade-off. Some miss by a little bit either way, but generally, you get what you pay for.

          Cheap stuff can work if it’s used well within its design parameters, but it won’t outlast a high-quality item in the same use case.

          One small example…

          I bought a $20 (yes $20. It was on clearance from $80 at Walmart) push mower a few years ago to handle a tiny patch away from home. It mowed okay for about two seasons now it won’t stay running, and it’s barely serviceable. It doesn’t even have a drain plug, a choke, or a variable engine speed. THIS is a throwaway mower.

          Replaced it with a used 2008 honda push mower for $200, and it’s an absolute beast doing the same job. You get what you pay for…

        • just-a-boy says:

          Ha Ha Ha Throw away customers! My 48″ Scag is from ’87, I got it used 22 Years ago. replaced a few belts & 1 blade spindle, 3 sets of blades in that time. My neighbors have gone through at least 5 crappy riders each. They buy crappy Home Depot riders and then don’t sharpen the blades, don’t check the oil, don’t change the oil. they last about 2 years & engine blows up. Funny that anyone else notices this…..

        • Miller says:

          Yeah, our neighbor got a low-cost Ryobi that he thought of as a throwaway, even if not the best brand it worked decently for a couple years and then he was ready to toss it. So then our neighbors up the street bought it off him for $15, cleaned it up and fixed the blades and fixtures and voila, works like new. I like to think of lawnmowers as mini-versions of cars, same basic engineering after all. They say with some truth that if you treat a solid built-to-last Toyota, Honda, VW, Hyundai or Mazda well enough, it’ll drive happily for 300K to 400K miles over a decade or two. The same basic idea with mowers, keep them maintained and a halfway decent brand will go for a decade or more.

        • Digger Dave says:

          My 2011 Deere 42″ Zero-turn with a crap-ton of hours is still going strong. It was under $3,000 way back in 2011. Is that a throwaway? My two larger mowers, a 2012 Diesel Deere with a 60″deck and a 2020 mid-size Deere will both last a long time. Even the stuff at Big Box retailers in the zero-turn category will all last a long time if they’re taken care of.

    • andy says:

      That’s not at all like my girlfriend’s tractor story.

  2. Phoenix_Ikki says:

    I am going to have to tell my kids once upon a time, you can walk into a dealership and negotiate on pricing and pay last than sticker even for desirable model. Paying sticker is generally a big no no…those were the days like when cars came with 8 track, cassette, CD player…

    • Xavier Caveat says:

      Ever notice that the only couple things Americans dicker on in price are both the most expensive. Nobody goes into Home Depot and tries to beat manager down on a Ryobi tool.

      • Anthony A. says:

        Try to find the manager to even try to do that!

      • El Katz says:

        Who would buy a Ryobi tool?

        I once went to a “liquidator” here in PHX. They had all kinds of returns from HD and Lowes. Guess what the biggest pile of junk consisted of? There had to be 1,000’s of Ryobi tools of all descriptions.

        The most expensive thing you can buy is a cheap tool. I learned that when I bought some Porter-Cable Made in China carbide router bits at Costco. On a first pass with a brand new bit, one of the carbide tips went into orbit at 20,000 RPM and embedded itself in the drywall in the garage. The whole box went in the trash. Imagine if someone was in it’s path.

        • rick m says:

          El Katz- getting hard to know who builds what. Porter-Cable is owned by Stanley Black and Decker (SBD). Ryobi is built under license of their name by Techtronic Industries Co., Ltd, which also makes the “orange” Ridgid stuff under license from Emerson and sells it to HD. They’re a Hong Kong company that also owns Milwaukee electric tool Co and many others. All the above may have changed. I own thirty -plus Milwaukee tools, all made in Milwaukee over forty years ago. If forced to buy a modern power tool, I’d look at Hilti and Makita first. Chinese router bits sling carbide bullets for sure, right up there with abrasive metal cutting wheels, grinder guard in place, safety glasses and face shield and it can still get you.
          “Throwaway” dogs have always been the most loyal and loving pets in my experience.

        • joedidee says:

          I have lots of THROW AWAY tools like Ryobi
          I use and abuse and then when time is up move onto next one
          VIRTUALLY all tools are throw away today
          if you ask manufacturer – they will tell you they have date of obsolesces built in
          it’s how they decide how many to build
          on the bigger tools it’s all about care and maintenance

        • HowNow says:

          rick, your comment about “throw away dogs” reminds me of a song back in the day: “If you want to be happy for the rest of your life…”

        • Dan Romig says:

          That is a shame. These brands have been sold and are now not what they used to be.

          I believe that a few months ago, I saw the Milwaukee Electric brand being advertised on the side walls of an English Premiere League ‘football’ match, and I wondered what the hell?

          I have an old Porter Cable sawzall & an old Milwaukee 9″ grinder that are built well and still work great. And an old Ryobi chop-saw with a solid steel deck that was made in Taiwan that also works great. But these are thirty years old.

          Made in China, but with old marquee names? No thanks.

          ‘El Katz,’ thank you, as always, for your great comments. Especially on the car business.

        • Lynn says:

          Ryobi stinks. I’m using my friend’s hand me down Ryobi tile saw. The saw is absolute crap, the plastic bits broke after one year of limited use and they won’t support new part orders, but surprisingly enough the motor is pretty good. So, I have it rigged up with an aquarium pump and a good blade and it does the job. Cut through granite countertops with it in a rigged table and am now cutting smaller river rocks with it as sort of a hobby until it dies.

          It’s probably cheaper to buy a Ryobi than rent equipment for just one larger home improvement job. If you don’t care how truly straight the edges are or you can hide them.

          Craftsman is now crap. I have an almost 30 YO circular saw of theirs that works fine. Has gotten plenty of home use. But the newer table saw’s plastic gears wore out very quickly. The thing is now pretty dangerous as the protective stuff broke and the blade can’t be lowered.

        • ERLE says:

          I have a Porter-Cable belt sander from the 1940’s. It has been on the shop floor for 65 years and has done some real hogging. Of course it is American made. It needs bearings on the drive pulley but that is because a dumbass ran it when it started making dry bearing noises. I guess you have to change the oil every other decade.
          As for Milwaukee electric tools, I bought several of them that are 1940 or earlier. One is a beast drill with #3 Morse taper. New cord and fluid and it will crank through steel plate if you weigh enough to make it feed. I paid $15-$25 dollars each for them.

        • Mitry says:


          I’m surprised no one mentioned Dewalt. I think those plastic gears are pretty durable and I’ve got 4 impacts, 2 drills, and every other rotating, reciprocating, and oscillating hand tool you can imagine and they do serious work. No stripped gears yet. To me the issue is battery life and longevity. In the 20v department, no one beats Dewalt’s system. In fairness to Hilti’s 36v system, it is superior to Dewalt’s 60v batteries which I avoid because of weight and reliability. Rigid has the worst batteries although there are crews that run them, I don’t know any crew that runs Ryobi, Makita and Milwaukee are okay, and Dewalt’s batteries are at the top. If I’m doing windows and doors, I’ll charge my batteries once a month doing 4 – 10 openings/day. Also every tool including a Hilti can be destroyed if you use it improperly. As far as actual tool quality and longevity is concerned, I’m sure any power tool that has light blue, red, or yellow on it will last a long time as long as it’s treated well. And fwiw, I run a Bosch corded track saw, Ridgid miter and table saws, and some Paslode air tools. Just my .02

      • Peacefuldaizy says:

        I am a manager at Sears. We regularly have people try to get a lower price on basic things like shoes, clothes, and even used jewelry.

    • SoCalBeachDude says:

      You still can or just walk out the door.

      • joedidee says:

        I started RE-PRACTICING the walk out door policy
        however many times I NEED THE tool now
        of course I plan out my purchases – fathers day for those throw away Ryobi – none this year
        christmas for nice to have if price is right
        and don’t forget when Ken and Karen run out of $$$ to buy junk
        they have garage sales were discounts can be GREAT

    • Nate says:

      Auto market is weird right now, but I doubt it’s the new normal. The Japanese and Koreans will happily take share from the Americans, again, and the Chinese would love to finally be players. It’s odd that car manufactures are lagging so many industries. Guess their management sucks + chip shortages. But betting the farm on chips was a stupid call by management, so I see this as management not as sharp as they used to be.

  3. ru82 says:

    Good topic. I was wondering where the excess inventory that I read online is supposed to be.

    Supposedly HDTVs?

    I have a friend who has a year old car in the shop that will not start because the dealer cannot find the part anywhere. It has been there for a week.

    Then my contractor drove to 5 Home Depots looking for a specific adhesive for putting up wall boards. Drove over 150 miles in the search. Normally it was always stocked.

    • SoCalBeachDude says:

      Just buy whatever you need on Amazon or through RockAuto and other places on cars. There are no ‘shortages’ whatsoever on anything.

    • SteveO says:

      on line Lowes

      • Apple says:

        You can check Home Depot inventory online. They can even pull it and place it in a locker at front for you. There is absolutely no reason to drive around hoping to find an item.

    • andy says:

      That’s what contractors say when they’re working on someone else’s project.

      • NBay says:

        The machinist at a small factory I worked at did that. He said he smoked a pipe mainly because dumping, loading, and packing it gave him time to come up with a good answer. Jack at Lasercraft, 91B20 probably knows him, I think he worked there.

  4. MiTurn says:

    Waiting and watching lumber prices. Got two important projects to complete this summer but I can wait.

    Prices are coming down finally, but hopefully they’ll drop even further in the next couple months.

    Watching…always watching…

  5. Beardawg says:

    Looks like things are generally normalizing for goods, which are most important to lower income folks. Inflation might be more tame in that sector going forward since buyers are leveling as well.

    Services, however, are likely to be the opposite, but if wages are going up AND service costs are escalating, maybe inflation will hit people who are a bit more able to handle it vs the lower income crowd ??

  6. Bob Morris says:

    This is why our local Toyota dealer is suddenly begging us to trade in our 2007 Prius.

    Gosh no. It runs great and is paid for.

    • Arizona Slim says:

      I have a friend who’s driving a Prius V that’s seven years old. Thing looks like it’s in mint condition and she’s not about to give it up.

      • Wolf Richter says:

        A seven year old car today is essentially near-new.

        • SoCalBeachDude says:

          That depends on the brand, the mileage, and how well it was taken care of over the past 7 years. Many are worthless junk.

        • VintageVNvet says:

          EXACTLY Wolf,,, and exactly why sold the ’19 Ram w 11K miles and bought a couple of 20+ year olds, both ”collector items” already due to condition…
          Both run just fine, and with their gas tanks full,,, at this point in time I can go about six months, maybe 8 months without buying gas, AT ALL…
          And then, when this current oil/gas ”crunch” is over,,, and it almost certainly WILL BE over sooner and later,,,
          Give one or both to the grands, for their first vehicle, both being USA made and ”tough enough” for a teenager to live through their first crash, etc.
          Just hope all you grand parents take this into consideration for YOUR ”grands.”

        • Jdog says:

          Remember when you went to high school, and back then most of the students who were driving, drove cars under 10yrs old?

        • Digger Dave says:

          My 2015 VW Golf Sportwagen TDI is just getting broken in at 100,000 miles. Barring unintentional damage or rust I seriously hope it has another decade or two in it. 50mpg, manual transmission and still programmable by a shade-tree mechanic. It can tow a reasonable amount of weight, has great cargo capacity, fun to drive. Checks all the right boxes as far as I’m concerned.

        • Harry Houndstooth says:

          Pure wisdom dispensed daily.

  7. Depth Charge says:

    Something is not adding up with the new car shortage. Semi conductor production is at its highest level ever, yet they still can’t build cars? Initially, they said this was supposed to be resolved last September. Almost 10 months later and it’s worse than ever.

    This is a failure of a business model. Off-shoring production is a national security risk. But beyond that, there’s something else going on. I don’t believe it’s semi conductors at this point. It’s the entire business model, or even something more nefarious, like an intentional price gouging situation.

    • Anthony A. says:

      Come to think of it, the “chip shortage” has not been front and center in the news in a good while.

    • Depth Charge says:

      I just found this, released a few hours ago:

      “Toyota cuts car production in July by 50,000 amid semiconductor shortage”

      Not buying this excuse anymore.

      • Green Bay says:

        I think the chip shortage is real, since people also (up to now) went on buying sprees for electronic goodies. Also, anyone with sleep apnea knows there is a shortage of cpap/apap machines (also due to the chip shortage) so people needing a new machine when the old one dies, or a person newly diagnosed as needing one is out of luck because months go by and we only get messages that there is a shortage and they still don’t know when we will get a machine.

      • Venkarel says:

        From a source I trust, chip manufacturing is at full capacity. The problem is company’s canceled their orders during the covid crash. Since there is not much excess chip making capacity (they can meet demand based on new orders) there is just no way to catch up with those previously canceled orders without stiffing the people scheduled now (probably at a higher price given the demand) than those that need catch-up orders. I know this applies to the car industry, if they never had canceled their orders during Covid, they would have the chips they need.

        • NBay says:

          Sounds right. When you your job is to cut “just-in-time” razor thin to save inventory costs, you have to really trust (and have your ass covered is another, and perhaps better, way to look at it) your sources of statistical projections. I remember the old days (at smaller companies) where the marketing manager thought about it, made some calls, and just threw out a number. I’d hate to guess how many are now employed at doing nothing but generating and selling projections, all computer aided.
          Telling the future has always been tough.

        • Jimmy says:

          Well the canced them because they didn’t know the government was going to step in and give away a bunch of free money to cause their actual demand to go up. You can thank the government for that fiasco.

        • NBay says:

          Don’t worry, next time the Capitol is attacked they’ll bring gas and explosives and that will be that.
          You already have most of the Corporate Oligarch Rule you have been programmed to think you want, and the final coup is coming.

    • Not Sure says:

      “Semi-conductors” cover a very large group of products. Production of high performance chips for data center and consumer computing has been off the hook, but there are still lots of shortages in specific components, especially the lower-margin ICs and passive components used in a lot of various automotive electronic modules. Getting a high-end CPU is not a problem, but getting an IC that makes a car’s interior lights fade as they turn off… That can be a real problem.

      I work for a rubber seal manufacturer and thank God our automotive customers aren’t our bread and butter… Their demand is absolutely dead right now. Worse yet, the American car makers really doubled down on trucks and SUVs in recent years. Even when they can get them ready to sell on a lot, buyers are not so excited about their gas-guzzling product line-ups now. Ford killed their small cars outright. Chevy hasn’t really been pumping Malibus and Cruzes out. Stellantis (Jeep, Dodge, Ram, etc.) pretty much just makes trucks, SUVs, and muscle cars. All 3 are still lagging on EVs and supply chain issues won’t help that situation at all.

      American car makers aren’t going to survive this. Mark my words, there WILL be talk of automaker bail-outs again in the next 2-3 years. Maybe sooner.

    • Boy Howdy says:

      Maybe the chips went to bitcoin mining

    • whatever says:

      The semiconductor shortage is real and it’s bad. NXP and IFX shifted production to increase automotive parts, relieving some of that industry – not nearly enough – and screwing lots of other segments in the process. In the smaller segments I work with it is a Darwinian death-match over some components, with normally couple-dollar parts going for well over a hundred in the gray market because no parts, no revenue. I’m also seeing lots of redesigns to avoid scarce parts, which not only adds engineering time and expense, but can also lead to six figure costs to recertify for FCC and CE regulations.

      And we are well over a year away from the shortage going away. So take it from someone in the industry: it’s real and not some conspiracy theory to price gouge.

    • Flea says:


      • NBay says:

        Mil Spec is an entirely different bunch. They usually get what they want. BTW, it’s probably the main industrial use for gold.

    • Ccat says:

      Yep. Look at the USA now having offshored even highly skilled jobs. Can offshoring doctors, lawyers and CPA’s be far behind given instant, free communications and zoom?

    • Wolf Richter says:

      It’s adding up just fine. Look at my charts of durable goods sales. The exploded. Consumer electronics (smartphones, laptops, etc.) exploded. All these things have lots of semiconductors. The shortage is in part with trailing edge semiconductors that are cheap, many of them have been around for years/decades, and that are produced in aging plants that no one wanted to invest in. And those are the chips that go into the controllers for your windows, your review mirror, your trunk release, etc. It’s the cheap stuff that no one wants to make and that the world has run out of.

      It’s still a HUGE problem, whether you or I buy it or not doesn’t matter one iota.

      • phillip jeffreys says:

        It’s also the very high end stuff – less than five angstrom density type. There’s only one manufacturer in the world that produces the equipment necessary to build/engineer the chip manufacturing infrastructure.

        • NBay says:

          Cars still run lots of TTL ICs. They don’t need much speed or bandwidth on Can Busses, and 5 volts is just fine. OP amps and 555 timer circuits.

      • Cynical Engineer says:

        It’s not just the low-end parts. I just did another part selection for a new design, and I couldn’t find a single microcontroller that had stock. Most of them are 0 stock at the distributors with the manufacturer quoting 52wk lead times on 10K quantity orders.

        As in….place the order, pay now, and we’ll ship you parts in a year…or so. Don’t like those terms? Tough!

        Automotive is getting parts because they wrote some Really Big checks to the semiconductor guys. I’m hearing stories of contracts for five years worth of parts…paid up front and non-cancellable.

        It’s a great time to be in the semiconductor business.

    • Raincat says:

      Called the dealer – it will take almost 1 year to get a new Ford Transit Connect Cargo van. Dealer said they are placing their next order sometime in August. $1000 down to place the order and freeze the cost – who knows what the interest rates will be by then – can’t lock that in.

  8. Not Sure says:

    Seems as though inventory-to-sales is back to normal in many segments of retail with autos being the really staggering outlier. That seems to jive with what I’m seeing on the ground here in SoCal. I haven’t had trouble finding consumer goods since stores seem to be pretty well stocked on most isles these days. But my sister in-law recently got T-boned by a red light runner. I’m the family car-guy so I ended up helping her find a used car. Boy, this was not a good time for her to have to buy a car. We managed to find an $8k Chevy Cruze which would have been maybe a $5-6k car a couple years ago. I put about $1k of parts in it to get everything up to par and had no problems finding replacement parts. I have to admit that I really haven’t noticed massive increases in car part prices or had any availability issues. Just did a bunch of transmission work on my ol’ BMW 335i to get another couple years out of it while the used car market calms down a bit. All new shift solenoids, a bunch of seals, new pan/filter, new fluid… Parts prices didn’t seem to be much more expensive than normal and I had no issues getting them fast.

    Food prices were exploding for a while there, but if I’m honest, it seems like that price expansion has at least slowed down in the last couple months. A good recession would hit demand for cars and houses hard, which might actually finally take a meaningful bite out of inflation. Too bad that even if we get inflation down out of the clouds, we’re still stuck with the ratchet effect on pricing… Our Fed was just fine letting inflation run “a little hot for a period” to make up for a sub-2% CPI, but they’ll never let deflation occur to make up for today’s 8%+ CPI.

    • SoCalBeachDude says:

      The word is JIBE (not jive) for things matching. Nothing will bring prices down faster than people simple not buying overpriced stuff.

  9. Flea says:

    Went to local day old bread store in Omaha roteelas best bread in the country ,were sold out of white bread .First time ever ,customers complaining,I just bought wheat bread .Wait a year be much worse

    • Whatsthepoint says:

      Who still eats white bread? We got a bread maker….we bake whole wheat and spelt loaves…no garbage preservatives and tastes much better, too..

  10. Roger Dodger says:

    “At food and beverage stores, supply is nearly back to pre-pandemic levels, at 0.78 months, which is a good thing:”

    Do you mean 0.78 hours? ;-)

    Several months prior to the pandemic I was talking to an assistant manager at a Walmart. I commented they were out of peanut butter, as college students had just come back. They said they had no room for inventory not on the floor, which is true.

    I said to them, “If there is a natural disaster you will be out of food in less than an hour.”

    Their response, “I know!”

    The following spring the pandemic hit, and shelves everywhere were quickly bare.

    Starting at least a decade ago, I noticed every time they “remodeled” a grocery story, there was significantly less inventory afterwards. Grocery stores were switching to “Just in Time” supply chains, just as industry had; business managers all go to the same colleges and learn the same ideas.

    Walmart, the store in question, just got done reducing the floor space for food, such that a female employee with tiny hands was having trouble lining the merchandise up on the shelf. There was only a single narrow row of many items.

    Locally, now, inventory on the shelves is thin, and seldom is there much behind the front row. They have been out of one store brand item for a coupe weeks; not Walmart.

    • Apple says:

      Six Sigma in practice. Lean inventory is now standard business process.

    • Wolf Richter says:

      The food business is a pipeline. Walmart has a huge amount of food in inventory. It’s on trucks on the road, it’s in warehouses, it’s in containers somewhere, it’s on ships, it’s getting unloaded from a truck at the store, it’s on a pallet in the back waiting for an employee to put it on the shelf, that’s Walmart’s inventory of food, and it’s constantly flowing. It’s not just what you see on the shelf.

  11. nevnej says:

    For cars, maybe initial inventory shortage has resulted in a more lasting shift in purchase mode? Seeing ads to reserve your car, buy from production pipeline and pick up when arrives at dealer. Surely less inventory more profitable for dealers, especially with inflation, maybe consumers adapting or made to adapt too.

    • El Katz says:


      What’s old is new again. That’s how it was done in the “olden days”. The original business model was “build to order” with limited on ground inventory. Once cars were built in lot sizes, the business model changed.

      The Japanese changed the model when they came to the U.S…. If you wanted a white Corolla, you got a blue interior… options were by “trim” levels. You couldn’t order power windows in a stripper nor crank windows in the top of the line car.

      Back in the dark ages, it wasn’t uncommon to find green cars with blue interiors and black carpeting. That’s what was left on the shelves at the end of the production. The manufacturer built these mutts and shoved them down the dealer’s throats through a process more affectionately known as “sales bank”. Sales bank usually occurred on a Friday before a long holiday weekend so the district managers, who had been called into the regional office, had an incentive to jam the units down the dealers’ throats so they could go home. Ask me how I know.

      • Halibut says:

        I was around car lots a lot as a kid in the 60s. I remember dealers complaining about being stuck with cars like that (as well as ugly duck trades)… “Heck, we’ll never sell that”…

        I never forgot what one (less pessimistic) guy always said… “Naw. We’ll sell it. There’s an @ss for every seat”

      • Tonyshop says:

        Seeing endless commercials on Freevee for Cadillac Lycra plug in. “Orders being taken now”.

        Are they getting a free credit line with these orders? Will they only start production once they can pay for the machine tools?

        Then there’s the $89,000 Jeep Wagoneer…bwahahahahaha!

  12. Jay says:

    Using 2019’s auto inventory number of 1.5 months, why is there concern about a drop down to 1.18 months when Ford is on record that dealers have to choose between legacy & future? Everyone knows the dealers are being cut out of future EV sales. All the car manufacturers are doing is lowering on hand inventory for two reasons:

    Prep for this new model
    Prep for the continued slow-down in sales.

    And don’t be surprised if they continue to cut out dealer inventory in the coming months to accelerate this transition.

    Just read a headline from Ford Authority to expect a ramp up in incentives throughout the later 1/2 of 2022.

    Any surprises?

    • Wolf Richter says:

      Inventory includes in-transit. 20 days supply means there is nothing on the lot – empty lot. It’s all in transit. So that’s your base.

  13. Michael Engel says:

    Cars that people want, high turnover categories, are almost sold out. Low inventory.
    Pickup trucks that people don’t want, are too risky, too expensive for dealers to stock. Bad items, No turnover..

    • El Katz says:

      If a dealer has purchased his allocation of vehicles, and the manufacturer has produced them, he is obligated to buy them when delivered. The exception is if the dealer exceeds his floor plan (line of credit) and, with the current inventory, is unlikely. It’s in their franchise agreement. The other option is to cancel their franchise and sell their inventory back to the manufacturer. Buy sell’s don’t count as they are a “going concern” and still obligated to fulfill their side of the franchise agreement or they could be terminated.

      Dealers are also required to stock a representative inventory of product (in other words, both the stuff that sells and the stuff that doesn’t sell so well). There are ways they can manipulate the sales data to not get stuffed with slow movers. I have seen where a small dealer sells one “slug” and he earns 6 because he was the only one dumb enough to report the slug sold. Sales reporting is an art form.

      Auto retail ain’t what the average person thinks it is.

      • Michael Engel says:

        1) El Katz. What if the min inventory isn’t sold. Can Ford dump more F-150 on dealers. It’s too risky for both. That’s why 50K F-150 have chips shortages and Toyota Camry don’t.
        2) Few major dealers are cancelled, absorbed by others. Bet their numbers is shrinking. Consolidation, for a discount. Some disappear
        completely, wiped out. More concentration in the mid-size level.
        3) The dealers are paying the price for Ford and GM mistakes.

        • El Katz says:

          Yes, Ford can and will dump inventory on the dealer. That’s the business model. The *risk* is that Ford will have to place incentives on the vehicles to move them. Anything will sell at a certain price. That’s the business… just like day old bread or expired canned goods.

          Correct. Major dealers aren’t canceled unless for morals clauses or failure to meet franchise requirements. While not common, it does happen. I have administered those and sat through court hearings.

          Are you implying there’s a “discount” for a franchise? Franchises are the property of the manufacturer. The dealer has a right to use trademarks, etc., granted by the dealer agreement, but the franchise cannot be sold. The assets of the corporation (dealership) are sold. The manufacturer has to approve the transfer and can withhold approval of said transfer for reasonable business reasons (no proof of source of funds, etc.). Absorption/consolidation occurs through “buy/sells” and are quite lengthy and not cheap. If a dealership BK’s or gets canceled, the franchise reverts to the manufacturer. Dealerships holding viable franchises (Toyota, Honda, Hyundai, MB, BMW, etc.) go for a premium, which is known as “blue sky”. The buyer will pay above asset value of the corporation (parts, buildings, special tools, vehicle inventory, receivables, etc.) for such dealership entities, but only if the buyer gets factory approval.

          Auto dealerships are the last vestiges of horse trading. Dealers know that there’s a metric sh*t ton of money to be made and, conversely, lost. Money losing dealerships are often engineered losses (expenses paid to their management companies, consulting fees, inflated rent factors, the Cessna Citation, yacht or girlfriend’s condo on the floor plan, etc.,). If you knew how the pricing of vehicles worked (what the real wholesale was to the dealer vs. what they show you when they claim to be selling it to you “at invoice”) you’d have a better idea how much money floats around unseen from middle management and the lot lizards. Rest assured that a MB dealership doesn’t operate on an 8% new car margin.

          Small dealerships and mid-sized dealerships will slowly become extinct. Operating costs are too high for the Mom ‘n’ Pops. I have a few close friends who have tried to stay independent of the public companies (small towns) and are getting squeezed by the big players in adjacent markets. There’s efficiencies of scale with centralized accounting, supply procurement, etc., that the bigs enjoy but the smaller stores don’t have.

        • Nathan Dumbrowski says:

          El Katz,

          Nice write up. Information well received. Appreciate you taking the time to educate.

        • Venkarel says:

          From a trusted source not verified. I heard one asset that is uniformly owned by the truly wealthy is car dealerships. Had a friend that used to audit them in coco county, he said it was a very good business (this was in the early to mid 2000s). One last anecdotal piece of evidence, used to date a girl who lived in a 10000 sq. ft. house (high school, her fathers, Harvard business school CEO and a “pick you colorful euphemism”), her next door neighbor owned car dealerships.

        • HowNow says:

          El Katz, thanks for the fascinating voyage through the car dealership landscape.

  14. The Bob who cried Wolf says:

    Two years ago my wife and I came to the conclusion that our 20 year old motorhome’s days were numbered. I told her that if we wait 5 years we’ll get a practically new 3-4 year old super fancy motorhome for much less than could be believed (mostly due to the stimmy crowd making impulse purchases and having to sell). Those times are coming much sooner, but we’ll be patient. Maybe we’ll even get an 80 inch flat screen for 500. We all saw this, why didn’t the fed? Or did they?

    • MiTurn says:

      My wife met a couple in Bonners Ferry, Idaho, who were living out of an RV. They had just moved from Texas and were looking for an affordable house (good luck with that). She asked what their space rent was at the RV park where they’re staying. She was floored: $900 a month. Say what?

      Point being, Bob, old motorhomes might be someone’s perma-home.

    • Apple says:

      You really think people used their stimulus checks to purchase a $100,000 motor home?

      • El Katz says:

        Maybe not the $1,400… but recipients of PPP’s? Could happen.

        The stimmy crowd bought the F-150’s or a toy hauler with sleeping quarters.

        • TimTN says:

          I know 2 people, in my small friend circle, that used ppp grants to buy RV’s. It’s real :-)

      • Confused says:

        People were permitted to withdraw $100,000 from their retirement account without having to pay the 10% penalty.

      • Depth Charge says:

        Ponder this: There were millions of people who were making more on unemployment than they ever made in their jobs, or their life. These lower paid people were getting their UE benefits PLUS another $600 per week – TAX FREE – to spend on all sorts of sh!t. Oh, and they didn’t have to pay rent anymore. That’s 4 additional car payments per month they could now afford. These people bought all the toys in the world with that free cash. It was a sickening display of poor leadership and filthy behaviors.

        • Apple says:

          Hmmm…I wonder who was in charge in 2020.

        • Depth Charge says:

          “Hmmm…I wonder who was in charge in 2020.”

          Irrelevant. I was responding to your rhetoric “You really think people used their stimulus checks to purchase a $100,000 motor home?” My answer is yes, the stimulus checks which came in the way of enhanced unemployment.

        • NBay says:

          “Sickening display of poor leadership and “filthy?” behaviors.”

          I won’t write anymore, as you always soundly defeat me using your verbal skills and I’m trying desperately to protect my credibility here.

      • JayW says:

        PPP absolutely, 100% sure. 75% of the $521B PPP monies stayed in the hands of the owners, or about $390B. That’s a crap ton of money.

        And, last year about this time, I read from a reputable source that 44% of the $10T+ in home mortgages had been completed in the previous 12 months. Now, it’s reasonable to assume that upwards of 70% of that was 90% refi’s. So .70 x $44T is $3.1T.

        That’s a lot of RVs. The whole zonkers refi business for the better part of 18 months was the REAL STIMULUS. All you needed was a house with equity, and the prior 10 years certain provided the juiced equity.

        Zillow says my dinky 1200 SF home in Woodstock GA increased in value by 29% just in the last 12 months. That’s insane!

    • ru82 says:

      I was talking to a relator a month ago. He said he and 12 other relators he knows where going to sell their home immediately, buy some old RV, live in them a year or two and rebuy a home at the market bottom.

      So RVs may be in demand for awhile. LOL

      • Depth Charge says:

        That’s a failed plan. There’s nowhere to put those old pieces of sh!t. RV parks have a 10 year old rule, so good luck with that. You need hookups for RVs. It’s nearly impossible to find them outside of said RV park.

        • CyanidePilled says:

          Also, if they put the bulk of their belongings in a mini-storage unit, that monthly expense has also increased. I finally emptied out my unit two months ago because the rate went up and it was no longer reasonable.

  15. Michael Engel says:

    RRP, new all time high.

  16. polecat says:

    Well, I can STILL buy homebrewing beer supplies, from a local retailerw – malted whole grains, yeast, malt (dried malt extracts, hops .. so I’m all good going into the blackhole maw of recession … coming out??, well ….. we’ll see..
    I can still brew a good mead/melomel, if I save some sediment from the carboy, so… dito w/ the beer grog.

    Purchased some items via ETSY, as I hate Jeffery’s gig* with a passion ..
    Just doing my part to keep those chains tight! just with the lessening guilt ‘;]

  17. El Katz says:

    Costco had awesome prices on Copper River Salmon ($13.99 pound vs. $30 a pound at the fancy grocer) and USDA Prime – not choice – well trimmed filet tenderloins. The spread between the Prime and Choice was $4. Looks like the “luxury” food categories may be moderating as it’s no longer in some people’s budgets.

    • Halibut says:

      Many years ago, they widened the range for USDA Choice. That’s why some steak houses will say “Upper 1/3 Choice” on their menus (and it’s very good).

      Choice can be excellent or it can be pretty bad.

      The grades you can count on are USDA Prime and Select. Prime is always very good and Select simply means that it was inspected and it won’t kill you.

      Anyway, if you can get *good* Choice beef, it’s the sweet spot for value and quality.

      • Jdog says:

        When I lived in CA, USDA Select was most of what the groceries sold, and Choice was much more expensive.
        Now I live in a State that is primarily farm and ranching, and the grocery stores do not even sell Select, just Choice, for less than we used to pay for Select. My freezers are full of Porterhouse, T Bones, Rib Eyes, and Tri tips.

        • Halibut says:

          You guys out West used to be the only ones that knew about tri-tip! I could buy it dirt cheap for years on this side the Mississippi, but the secret’s out now. Those days are over.

      • andy says:

        Wagyu beef is pretty good too. It’s like Japanese version of USDA Prime.

  18. Anonymous says:

    Nationwide IV contrast shortage due to most contrast being manufactured in Shanghai is forcing us to ration contrast for emergency room CT studies including for pulmonary embolus and GI bleeds as well as embolization procedures (Omnipaque and Visipaque).

    We still have Gadolinium contrast for MRI (made in Canada I think), which has mitigated the problem, but it cannot replace everything. Not only are we doing less contrast studies, we are using less contrast per study, reducing some of its diagnostic value (decreased quality).

    Its obviously going to be affecting lives at some point and the shortage has been going on since Shanghai was shut down over a month ago and expected to go on for a few more months, supposedly mid August at the earliest…

    This is a survival issue, not just a national security issue. We have outsourced our production to a nation that is not within our military alliance/framework and quite frankly even if the nation was in that scenario perhaps we should have only outsourced a percentage at most. Not sure if China is using this as an economic/political asymmetric weapon.

    China decides COVID shutdown and we may have to die? The many errors of prior administrations has led to the situation where we are dependent on others. Globalization has some benefits like reduced costs but its not free. Loss of jobs and more importantly outsourcing of our control.

    This shutdown has exposed so many problems, that I suspect without government leadership, the escalating costs will not stop and the decreasing quality to make ends meet will not slow. The USA is not functioning like a first world country at the moment.

    With the shortage situation, we are already suppressing costs due to suppressing demand. When the contrast supply increases, costs for unit of contrast will not come down, will adjust for inflation. Consumption will rise due to backlog and return to normal usage patterns without a major paradigm shift. There is already hidden costs and demand due to this supply delay that have not shown up in the economy/ system yet (just like during the COVID shutdown).

    The belief that inflation will slow with increasing interest rates for demand suppression is on the assumption that there isn’t already a shortage to begin with. There are still sectors in the economy where demand is not only high but supply is short. We cannot suppress demand further or forever. This particular demand will not go away. If other sectors of the economy are similar to where medical imaging is, I fear we are headed for hyperinflation, or severe inflation for years to come. Its just not baked into the system yet and we cannot cut demand for these kinds of expenses… if interest rates rise high enough to squeeze the economy into recession or even worse deflation, maybe? Its so hard to predict just how much damage there is to the economy at this point… if healthcare costs rise to adjust for inflation, we will be rationing healthcare (we technically already are out of necessity).

    Quite frankly, I don’t think we are in the position to fix this ourselves… I just don’t think rate cuts alone are going to solve this… but it is obvious it is one necessary component and its needed faster than whatever Fed is doing now.

    • Anonymous says:

      Sorry I meant rate increases, not rate cuts

    • tom15 says:

      No worries. As part of the BBB new deal we are living in, we just put blackrock in charge of china relations. Problems solved.

    • JoeC100 says:

      I had a high gadolinium level show up in some blood work last summer. My doctor could not figure out where it had come from as I had not had any procedure that would have used it.

      When I met with my other doctor, he said “ammunition”.. apparently I had picked this body burden up back in my USMC/RVN days.. So I wonder if gadolinium is also needed for ammunition production – which would be another good reason not to depend on another country for sourcing..

    • NBay says:

      I always thought outfits in Eastern Canada had all the cyclotrons and synchrotrons to produce that stuff. (cheaper power I guess) When did China get in the picture?

      When your hospital MBA managers completely took over, I suspect.

      “Managed Health Care”

      As retired Radiologist sunny here told me, “business and medical ethics are night and day.”

  19. Michael Engel says:

    El Katz, great stuff.
    1) If dealer is canceled or bk the franchise revert to mfg.
    2) Ford & GM sample line have no/ little demand. They produce expensive pcs in era of high gas prices, higher interest rates. They are located on near major intersections with large parking lots, large RE in online era, when buy/sell is done by clicking, employing sophisticated Mech’s in era of thousand computers in each car and ev. It’s an old business model with huge o/h and payroll selling low turnover items .
    3) They must find a buyer, otherwise the dealership can go dark, or erased.
    4) Option #1) a shotgun marriage.
    5) option 2) large discounts, incentives to compensate for the
    risk in the next 4-5 years. The price must be deeply discounted for
    10% – 15% compounding.

    • El Katz says:

      The mfrs have been attempting to revamp the business model for years. Sadly, the adoption of those changes have been hampered by the dealer’s gaming systems that – in theory – could smooth the entire process (the stated goal was 1 hour transactions from arrival to delivery). But in practice, not so much.

      The company tried bailment pools of limited production vehicles – Dealer had to provide a sold order and the car would be shipped. That worked for about 30 seconds until the bailment pool was drained by a few enterprising dealers that simply lied. Made up fake deal jackets and put the cars on another franchise lot, their used car or remote lot once they were delivered. Dealers can avoid sales tax by not registering the car… just titling it. You simply pay the fee for the title. Hit the RDR (retail delivery record) and they get additional allocation and access to the hot stuff. Where do you think those 300 mile certified used cars come from?

      Online sales strategy development started…. oh….. in about 2005ish. I was part of a development team. Spent countless hours in pressurized tubes flying around trying to find a happy medium between customer desire, manufacturer plant capabilities/limitations, and dealer acceptance. What most people don’t realize is that the profit of a dealership are used cars and the fixed operation (service and parts). New car sales once were the main profit driver, but in a normal environment (pre-Covid), not so much. Many dealers lived off of incentives, holdback, volume, and CSI bonuses. This new online model was also a threat to their F&I and aftersale profits – aka “rust and dust” because it’s hard for them to pound a customer into extended warranties, worthless add-ons, and maintenance contracts in a short period of time and nearly impossible to do outside “the box” online. So, dealer resistance was high.

      Manufacturers don’t want to hold inventory. They want it on the dealer lots as the manufacturer doesn’t get paid until the vehicle loads onto the carrier. The cash draft system makes payment immediate. Most plants can only hold a few days of production before they run out of storage. So the ability to reduce dealer trades is limited (despite online dx capability) – and, in an era of instant gratification, no customer wants to wait for their new car… plus there’s always the risk of buyer’s remorse, another dealer having *the* car, or a better salesman, and stealing the deal. Factory production, being lot sized and packaged (use “build your car” on a mfr site… see what happens when you want to change something as simple as wheel style), builds products en mass. Oddballs are at the tail end of a cycle or never built at all. We used to game that feature when we had a nice brass hat and they changed the company car policy as to what you could order. We’d choose a white sedan with leather and a manual transmission – that we knew would never be built – and drove the car we liked until it miled out and, hopefully the preferred models would be put back into rotation.

      Online inventories should help… if the dealer is using the manufacturer’s website platform, the inventories are auto-populated. The entire pipeline could be visible, but dealers – being dealers – will use that to try to cherry pick a competitors inventory. So… *hot* cars are reported sold to remove them from view. Dealer’s can unwind the sale in the same sales month so there’s no harm other than manipulating data.

      Human nature dictates how well any system will work. State laws limit the punitive steps a manufacturer can take against a dealer (Ever look at state lawmakers source of employment? Many are dealers or related to one. The other’s are paid for by the state dealer association lobbyists.) So, you get crippled systems.

      Discounts can be managed. The manufacturers captive finance companies make big profits. The manufacturers use buy downs to reduce rates or extend the terms to improve affordability rather than offer outright cash discounts which damage the brand image. Another tactic is to fluff the lease offers to get the payment down out of the stratosphere. Play with the money factor, use lease discounts (hidden capital contributions), “customer loyalty” leases…. fiddle with the drive off amounts. Lots of tools and many of the fish will take the bait.

      As far as employing sophisticated technicians, many simply load the “parts canon” and keep replacing components until it stops throwing codes. Not many “grease monkeys” left.

      Here’s a public service announcement: If you lease an EV, make sure the federal rebate is disclosed and deducted from your capitalized cost. You cannot personally claim it (you don’t own the car – the finance company does) and the finance company (or dealer) will take it as profit if you don’t ask for an accounting of it. Most pigeons will never even notice. I learned this trick when I was structuring incentive offers and noticed that it was conveniently missing from the offer calculation. I really did p*ss off the Big Cheese of the finance company when I forced it to be applied to the deal. I immediately fell off his Xmas card list.

      • HowNow says:

        Next time I go car shopping, I’ll bring armed guards and at least one particle physicist.

      • Peachy says:

        For someone who isn’t too handy at fixing cars like myself, do you have any suggestions either where to get a car worked on or where not to? From your comments here it seems dealerships are not the best place in most cases.
        I know in my own experience they always try to sell
        me things I know I don’t need. Makeup problems with my car I know I don’t have etc.

        Thanks for sharing.

  20. steveNJ says:

    Madison Avenue in Manhattan is home of the most expensive retail (in the 50-60s streets). It’s half empty. Empty stores. Gone. Maybe a combination of rents, lack of workers (you need to be injected to work in Manhattan, so many left) and online buying. Prices are often slashed for no reason. And little buyers.

  21. Marbles says:

    Speaking of the supply chain, shortages and overstock. Why does it seem more likely when I do need something specific, that it’s out of stock, or on back order? Or the replacement is not what I need.

  22. Mike R says:

    Where inventory is low, those retailers are preparing for the inevitable very near term recession, and then greater depression.

    • Wolf Richter says:

      Nonsense. Auto dealers CANNOT GET what they want because automakers CANNOT MAKE what they want because of the semiconductor shortages.

      • David Hall says:

        There are 1000 chips in an ICE vehicle and over 2000 in an EV. There are sensors and control modules. Even catalytic converters are in short supply.

  23. SnotFroth says:

    I’ve been dealing with shortages of chip-based stuff like security cameras and wireless access points for months.

    Now getting firewalls is a big problem. All the distributors are running dry. I hear rumors that some manufacturers are creating new stand-in models with different chips, and possibly lower performance, just so that they have something to build and sell.

  24. Richard K. says:

    Hi Wolf,

    Apologies for hijacking the thread, but I was wondering if you could do a post on the actions of the BOJ in the last month or so. I can’t really understand what is going on.

    • Wolf Richter says:

      I don’t care what stories the BOJ plants in the media. Bloomberg has misreported on the BOJ ever since the BOJ stopped doing QE in Feb 2021. While some kiddo Bloomberg reporter said that the BOJ was buying bonds hand over fist, the bond holdings actually peaked in Feb 2021 and then started declining. The Bloomberg nonsense about the BOJ’s bond buying spree then got re-reported everywhere, while in fact, the BOJ’s bond holdings fell.

      So I look at the balance sheet, and ignore the Bloomberg garbage and its derivative forms. About every three months I do an update on it. I do it every three months because the BOJ’s balance sheet runs in a three-month cycle, where a large long-term bond issue matures and comes off the balance sheet in one month, and the balance sheet drops, but then the next month they BOJ replaces them, and the balance sheet rises, and then there is one month of additional movement, up or down. So early July may be the next update, and we’ll see what the BOJ actually did.

      • Dan Romig says:

        Wolf, thank you for the update on the BOJ.

        I too saw some of the “derivative forms” in clickbait, and was hoping that the BOJ wasn’t loading back up.

        Look forward to your next update in early July.

  25. Michael Engel says:

    1) Since Mary Barra, “I love it, I want it, the red Silverado is mine”
    blue collar workers and contractors shifted to vans.
    2) Ford & GM line is not viable today. Car dealers should look for other suppliers that innovate (China, India..) that fulfill most people needs : inexpensive, basic mean of transportation to move from point A to B. We don’t need 5K computers and a spy techno antenna to take kids to the soccer field, shop in Walmart, or go to work.
    GM & Ford forgot the customers. They please and e silicon valley, for high tech and software engineers, executives perks, salaries and bonuses
    3) Crooked stores mgr, report fake sales in every industry. They manipulate to survive, make a buck. They up the stupid, big shots owners, until they go broke.
    4) If Ford & GM in troubles, Intel AA and US steel will pay the price.
    5) Jolts are rising because the rookies, out of school ask more than mgrs salaries.
    6) Retail sales might soon tank to below Feb 2021 lows.
    7) The Fed hike cont, RRP to a new all time high. A banking crisis might start in Europe. It will infect our shadow banks first.
    7) The zero/ negative rates might be stickier than JP imagine. His RRP war chest might be depleted faster than he planned.
    8) Tokyo RE and Nikk225 1989 devaluation might shift west. Japan got the cash after James Baker Plaza accord. We got the cash from our beloved printer.

  26. learned a few lessons yesterday in whitehorse yukon. thr main tire shops are booked way ahead and don’t have squat for inventory a Nd are brutally expensive . But there’s a guy I know who somehow was able to slap two used tires on my rims in an hour or so and charged me 160 for both installed tires. another guy got me a new tire and rim for 250 instead of the 700 I was quoted with a weeks long wait.
    it pays to know some useful guys and treat them like the gold they are.
    oh and the wheel bolts I needed were unobtainable and 60 dollars each until another guy sold me 8 of them for fifty bucks
    I tipped him another 50 . I tipped the others too of course.

  27. Russell says:

    I must have missed it. Where are there surpluses in the market and where can I find bargains on stuff I don’t need?!?

  28. Thanks Wolf. This was a great article because I’ve been reading a lot of articles about inventory being overstuffed, and they just didn’t make any sense after months of short supply. So, if figured it had to be due to the reasons you have laid out. That was the only way to make sense of it — that the backlogs in the supply chain just finally pushed through and then there was too much of what had been in short supply and a not enough of a lot of other stuff. I appreciate your drilling down into it.

    It is the only thing that could make any sense in my mind. People were presenting it as if it meant the times of inflation were over and the times of shortages were over, but it seemed a lot more reasonable to see this as a time different than most people are used to when they try to make sense of this kind of thing, so they weren’t seeing that it was really logjams breaking free and then clearing up and getting clogged down the line because, by the time the goods arrived, as you say the customers for those particular kids of goods had moved on. Once you understand it that way, you realize this isn’t the sign of a recovering economy or a strong economy or even of receding inflation. This is evidence of a broken economy that is no longer capable of efficiently delivering desired good when they are needed or desired.

    • Wolf Richter says:

      “This is evidence of a broken economy that is no longer capable of efficiently delivering desired good when they are needed or desired.”

      This goes on the list of the best lines ever posted in these comments.

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