I was doing some thinking about the role of automation and computers in the economy, and thought to look up the ratio of inventories to sales. It turns that the Bureau of Economic Analysis has tables 5.7.5.A (through 1997), and 5.7.6.B (from 1996 through Q1 2009) which both show the ratio of private inventories to final sales on a quarterly basis (but with sales expressed at a monthly rate). I'm not quite sure the reason for the two tables, and they may not be exactly the same measurement, but they seem to tell about the same story:
- Inventories have fallen from about 6 months worth of final sales right after WWII, to just over 2 months worth and still trending down slowly.
- Volatility of this ratio in recessions has almost disappeared, indicating the system can now respond very rapidly to changes in final demand.
Of course, nothing could ever happen to all those computers, right?