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One U.S. Recession Indicator Looks Less Scary On Closer Inspection

Things seem better once you check under the hood.
relates to One U.S. Recession Indicator Looks Less Scary On Closer Inspection
Photographer: Luke Sharrett/Bloomberg

Don't worry about the growing cache of goods that have been stockpiled by U.S. wholesalers. Some say that portends a recession, but Bank of America Corp. analysts claim this cycle is different.

The inventory-to-sales ratio — a measure of the stock of inventory as a proportion of sales fulfilled — remains stubbornly high, even as the Federal Reserve suggests the U.S. economic recovery is on track. It implies that even robust consumer demand might not be enough to spur businesses to ramp up production and investment, or for the positive impulse from the $13 trillion "gorilla" to be spread across the globe in the form of accelerating imports.