After two consecutive months of disappointing wholesale business data, with both inventories and sales reporting disappointing prints in June and July, the August wholesale data surprised strongly to the upside, confirming that the trade war-impacted summer lull may have been a one-time event.

With expectations for an unchanged 0.8% print in wholesale inventories, the latest number came in stronger than expected, printing at 1.0%, and the biggest monthly jump since October 2013.

Meanwhile, alongside the rebound in inventory accumulation ahead of what businesses believe will be a strong Q4, wholesale sales also ticked up, rising from an upward revised 0.2% (originally 0.0%) to 0.8%, also beating the consensus print of 0.5%, and indicating that US businesses are once again humming.

And so while much of the rest of the economy continues to hum along, gliding on Trump’s fiscal stimulus, after two disappointing months of wholesale data, the recent weakness appears to have faded into the rearview mirror as business ended summer with a bang, and numbers which will provide an upward revision to Q3 GDP, while pouring even more gasoline on the Fed’s tightening narrative.

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