Unsold Inventory Index

Yes, we actually track this. Companies report the balance sheet number; they track inventory levels copiously. We then add up the reported inventories of all n-hundred companies tracked in the index.

And everything is relative in context. That is, some subsets of inventories are cyclical, right? You'd expect tractor part-related inventories to be depleted in September, and then restocked into May when they start selling a lot of tractors again, at least those for farming purposes.

If, with all the proper stats elements adjusted, inventories then rise on a relative and absolute basis, that's likely a bad moon a-risin' for the economy. Less demand than what companies expected; companies will have over-produced stuff to sell. So then they have to cut prices to move things off the shelves, and...it's all just a mess.

So that inventory index number is actually really important for investors and economists trying to figure out if the canary in the mineshaft is dying, or just, um...yawning.