Beware the bounce
The really terrible numbers earlier this year had a lot to do with inventories: businesses decided they had too much stuff in warehouses, so they slashed production well below final sales. Correspondingly, the green shoots we’re seeing are to an important extent the result of the end of this de-stocking process.
The question is, how much has the underlying situation changed? Are we seeing anything more than the inventory bounce most of us have been expecting for three or four months?
Jan Hatzius at Goldman (no link) is skeptical. His latest suggests that final demand is still going nowhere: