Looking at the Inventory Data from ISM

Within the ISM data reported today there was an interesting dynamic at the inventory reporting lines.  Businesses reported that their own inventories were growing and that customer inventories were still too low, but approaching more normalized levels.  (Customer inventories has a tendency to always be below 50--if you're selling someone something you always think they don't have enough of it.  This series got as low as 35 in 2009.)

Increasing inventories is good at the bottom of a cycle because inventories provide a slingshot effect to GDP when they go from liquidation to accumulation.  However, once the "V" has been realized, increasing inventories along with the recognition that customer inventories may not be quite so low is not as positive.  It's a sign that the inventory slingshot effect is coiling the other way.  The inventory to sales ratio which is reported mid-month should provide further insight.