Higher Isn’t Always Better Either
Meantime, the upward movement in other indicators can also be viewed through both a positive and negative lens.
For example, Michelle Meyer, US chief economist at Mastercard Economics Institute, pointed to wage growth. While rising wages mean Americans have greater wherewithal to keep spending, sustained earnings growth contributes to overall inflation pressures.
Inventories, which have been the subject of much debate recently after Target Corp. cut its profit outlook in part due to bloated stockpiles, are similar.
Inventory growth can mean businesses, if they are confident demand will stay firm, are stocking up to counter disruptions in supply chains. Higher levels of unsold goods can also indicate demand is starting to weaken.
This article was provided by Bloomberg News.