Sans The Inventory Builds—A Hollow Recovery

For GDP, one big piece that’s missing, or what’s kept it at a lower rate than in the comparable 2014 period, is inventory. Three and four years ago, American businesses couldn’t get enough. They piled into it at a record pace. The reason they did was almost surely Janet Yellen, or at the very least the mainstream economic projections that start always with the Fed’s upward biased models.

The BEA estimates that in the four quarters after the “rising dollar” began (Q3 2014 to Q2 2015), US firms took in around $400 billion of additional inventory. In dollar terms, it was by far the most in history; in percentages (of GDP) it was the largest inventory splurge since the late nineties.