They are not. Business inventories in the U.S. dropped fairly sharply in February after massive accumulation in previous months. Especially disturbing was the inability of firms to get ahead of the curve. While inventories dropped, the ratio of inventories to sales increased because sales dropped more. This is ominous.
Firms set their inventory targets based upon how much they think they can sell in a month.
So the March numbers will likely be ugly. If they are, we will ultimately look back on the first quarter of 2001 as being far worse than we originally thought. The key will be what happens next. We will find out on May 14th when we get the March inventory data. Get Windows Media Player 7 in order to view streaming video and audio clips in Windows Media Player format.