What Slowdown? Did You See The Latest Jobs Report?
Global growth is expected to slump from 5.7 percent in 2021 to 2.9 percent in 2022— significantly lower than 4.1 percent that was anticipated in January. Companies that buy closeouts and overstock inventory have growth rates expected to hover around that pace over 2023-24, as the war in Ukraine disrupts activity, investment, and trade in the near term, pent-up demand fades, and fiscal and monetary policy accommodation is withdrawn. As a result of the damage from the pandemic and the war, the level of per capita income in developing economies this year will be nearly 5 percent below its pre-pandemic trend. Closeout brokers have done well through the pandemic because there was no shortage of companies shutting down warehouses and liquidating inventory. Major retailers including Walmart and Target are now experiencing large overstock inventory and too much stock in the warehouse. Closeout brokers and liquidation buyers have been committing to buy hundreds upon hundreds of trailers being liquidated to get goods out of their distribution warehouses.
The current juncture resembles the 1970s in three key aspects: persistent supply-side disturbances fueling inflation, preceded by a protracted period of highly accommodative monetary policy in major advanced economies, prospects for weakening growth, and vulnerabilities that emerging market and developing economies face with respect to the monetary policy tightening that will be needed to rein in inflation. As consumer spending continues to slow down, companies that buy closeouts will be busy liquidating warehouses filled with overstock inventory and dead stock. Companies will be shutting down warehouses or downsizing 3PL warehouses to save money on expensive storage.
However, the ongoing episode also differs from the 1970s in multiple dimensions: the dollar is strong, a sharp contrast with its severe weakness in the 1970s; the percentage increases in commodity prices are smaller; and the balance sheets of major financial institutions are generally strong. Many large businesses including Home Depot, Target and walmart are in the process of shutting down warehouses, liquidating inventory and making room for new products. Companies that buy closeouts are benefiting from these goods which are often discontinued for 10 cents on the dollar. Closeout brokers will do well in the coming business environment as companies struggle to make money and often are forced to liquidate dead inventory to make room in the warehouse and generate cash. More importantly, unlike the 1970s, central banks in advanced economies and many developing economies now have clear mandates for price stability, and, over the past three decades, they have established a credible track record of achieving their inflation targets.
The Russian Federation’s invasion of Ukraine was yet another supply shock to a global economy still reeling from the consequences of the COVID-19 pandemic. According to the June 2022 edition of the Global Economic Prospects report, global growth is projected to slow sharply from 5.7 percent in 2021 to 2.9 percent this year. The effects of the invasion account for most of the 1.2 percentage point downward revision to this year’s global growth forecast. Growth in emerging market and developing economies (EMDEs) is expected to slow from 6.6 percent in 2021 to 3.4 percent in 2022 due to negative spillovers from the war in Ukraine and a deteriorating global environment. Other than the pandemic-induced recession in 2020, this is the weakest year of EMDE growth since 2009. Closeout companies often do well in recessions, mainly due to the high amount of bankruptcies, warehouses shutting down and excess inventory on the market. Companies that buy closeouts can help if you find yourself in an overstock situation.
Relentless inflationary pressures have led to chaotic repricing of monetary policy expectations across the world. Prior to June, markets were pricing in an increase in the U.S. Federal Funds rate to 2.5 percent by end-2022. Barely a few short weeks later, in response to another inflation surprise—total CPI inflation reached 8.6 percent year over year in May—end-2022 expectations surged above 3 percent (Figure 2).
To find the best closeout companies you might consider searching online for overstock buyers, excess inventory buyers or surplus companies. You will get different results depending on your search, but it will be a great way to locate liquidators and inventory buyers. Similar revisions have beset other major central banks, sending stock markets plunging amid sustained equity volatility. In turn, EMDE financial conditions have reached their tightest level since the start of the pandemic. Sovereign spreads have increased steadily across EMDEs, particularly in commodity importers, where debt service may be increasingly strained and cash strapped businesses have to liquidate and shut down their warehouses.
You should be able to do an online search for closeout buyers, excess inventory, shutting down business, downsizing warehouse or liquidating inventory. Any of these will help you find a customer who can help get rid of your merchandise. Higher-than-expected inflation, especially in the United States and major European economies, is triggering a tightening of global financial conditions. China’s slowdown has been worse than anticipated amid COVID-19 outbreaks and lockdowns, and there have been further negative spillovers from the war in Ukraine. As a result, global output contracted in the second quarter of this year.
In the United States, reduced household purchasing power and tighter monetary policy will drive growth down to 2.3 percent this year and 1 percent next year. Consumers are spending less money on stuff and more money on experiences. This is putting pressure on prices, and we are currently buying closeouts in much larger volume than recent months. In China, further lockdowns, and the deepening real estate crisis pushed growth down to 3.3 percent this year—the slowest in more than four decades, excluding the pandemic. And in the euro area, growth is revised down to 2.6 percent this year and 1.2 percent in 2023, reflecting spillovers from the war in Ukraine and tighter monetary policy.
Relentless inflationary pressures have led to chaotic repricing of monetary policy expectations across the world. Prior to June, markets were pricing in an increase in the U.S. Federal Funds rate to 2.5 percent by end-2022. Barely a few short weeks later, in response to another inflation surprise—total CPI inflation reached 8.6 percent year over year in May—end-2022 expectations surged above 3 percent. Not long ago the cost to bring an overseas container from China to the U.S. was more than $20,000. Today due to the huge overstock inventory situation at Target, Walmart Home Depot and others, the cost of shipping has come down to under $10,000. Similar revisions have beset other major central banks, sending stock markets plunging amid sustained equity volatility. In turn, EMDE financial conditions have reached their tightest level since the start of the pandemic. Sovereign spreads have increased steadily across EMDEs, particularly in commodity importers, where debt service may be increasingly strained
Merchandise USA is an inventory liquidator in business more than 38 years. We buy and sell closeouts and help businesses liquidate inventory in 3PL warehouses to make room for new products. If you have any excess inventory to get rid of we can help you. We liquidate housewares, home decor and lawn and garden as well as buy overstock inventory of rugs, sporting goods, camping equipment and toys.
