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Cuts In Inventory Point To More Job Losses

Posted By admin || 12-Feb-2009

According to an article in the Star-Telegram, business inventories fell by the largest amount in 17 years increasing fears of more drastic job losses .

The article said:

On Tuesday, the Commerce Department reported that wholesale inventories - goods held by distributors that generally buy from manufacturers and sell to retailers - fell 1.4 percent in December, the biggest amount in nearly 17 years and nearly double analysts' expectations. Wholesale inventories make up about 25 percent of all business stockpiles; factories hold another third and the rest is held by retailers.

Consumers facing financial difficulties, including foreclosure and bankruptcy simply are not buying like they did when times were good and credit was easy. Retailers, who have expanded on the era of easy credit are now suffering major contractions in sales and can't clear their inventory fast enough.

They are ordering less and experiencing job losses expecting for the lag in sales to continue. This has a ripple effect throughout the retail system, causing wholesalers to order less from manufacturers and causing manufacturers to produce less. With less production and sales there will be more job losses for millions of Americans.

Once the pain begins to hit the manufacturing base, we are dealing with a protracted issue that will continue for years. No one is immune to the job loss fallout. Workers in all sectors need to be prepared for possible job losses, corporate bankruptcies and salary cuts.

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