Since oil prices are still not well quantized, I am leading more toward the latter assumption. We are getting better energy efficiency, but mostly dominated by the flow adjustment process.
For further evidence, look at this inventory report from Justin Lahart at WSJ.
As a result, the inventory-to-sales ratio fell to the lowest on record — 1.206 from 1.220. One reason why inventories are so low: Many retailers were ordering holiday wares during the spring and summer, when worries over the possibility of a double-dip recession were running high.If retailers were sure of profits, they would be keeping inventory levels snugged up.
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