If the Federal Reserve is truly “data dependent,” then the data just keeps undermining its case for an interest rate hike this year. Wholesale inventories rose in August, and sales fell, flashing a recessionary warning sign.

According to the Associated Press, the Commerce Department reported wholesale inventories rose 0.1% in August, while sales fell a full 1%.

The dip in sales follows a general year-long trend, with the number dropping 4.7% over the past 12 months.

Meanwhile, inventories have increased 4.1% over the last year. Wholesale inventories currently stand at a seasonally adjusted $583.9 billion.

Reuters reports the rise in wholesale inventories was higher than expected. It was the largest increase in the last seven months:

Inventories for durable goods climbed 0.3 percent, with computers up 1.9 percent. At August's sales pace it would take 1.31 months to clear shelves, up slightly from 1.30 months in July.”

This inventory-to-sales ratio is particularly troubling. It represents a new cycle high, and according to Zero Hedge, the absolute dollar spread between inventories and sales has never been higher.

Even Reuters admits this has the potential to weigh heavily on the economy:

An inventory-to-sales ratio that high usually means an unwanted inventory build-up, which would require businesses to liquidate stocks. That in turn could weigh on manufacturing and economic growth.”

The AP story on the rise in wholesale inventory includes some uncharacteristically pessimistic reporting, putting the numbers in a context suggesting broader problems in the US economy:

Hiring has suddenly slowed. Employers added just 136,000 workers in August and 142,000 in September, well below the 3-month average of 324,333 at the end of 2014. Sales of existing homes have also fallen after strong gains earlier in the year.”

Peter Schiff provided in-depth analysis of the dismal jobs report when it came out earlier this moth.