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Economy in Brief

U.S. Wholesale Inventories Rise While Sales Decline
by Tom Moeller  March 9, 2016

Inventories at the wholesale level increased 0.3% (2.0% y/y) following little change in December, revised from -0.1%. The increase reflected a 1.1% rise in the nondurable goods sector despite a 1.6% shortfall (-11.2% y/y) in petroleum inventories. Paper & products inventories increased 4.2% (2.6% y/y) while apparel inventories ticked 0.1% higher (13.5% y/y). A 0.3% drop (-0.4% y/y) in durable goods inventories was the sixth down month in the last seven. Electrical equipment inventories fell 3.6% (-0.9% y/y), but motor vehicle & parts inventories increased 1.5% (12.0% y/y). Furniture inventories rose 0.9% (6.0% y/y) as machinery & hardware inventories gained 0.2% (-0.8% y/y).

Wholesale sector sales declined 1.3% (-6.4% y/y), also down for the sixth month in the last seven. Durable goods sales fell 1.9% (-6.7% y/y) as furniture & home furnishings sales dropped 5.3% (-0.3% y/y). Computer equipment sales declined 6.4% (-14.0% y/y) and machinery sales eased 0.2% (-5.1% y/y). The 0.8% decline (-6.0% y/y) in nondurable goods shipments reflected a 6.9% drop (-25.8% y/y) in petroleum sales. Chemical sales fell 2.0% (-7.8% y/y), but apparel sales increased 1.1% (-1.8% y/y). Paper products sales increased 1.1% (1.5% y/y).

The wholesale trade inventory-to-sales ratio rose to 1.35, up from 1.14 during all of 2010 and 2011. The nondurable I/S ratio surged to 1.04 as the petroleum ratio jumped to 0.52. The ratio in the apparel sector of 2.10 was increased from 1.88 one year ago and the chemicals ratio of 1.27 also was elevated. The I/S ratio in the durable goods sector of 1.67 reflected a higher 2.85 in machinery and an increased 2.20 ratio in metals. The ratio of 1.00 in electrical goods also was just recently higher.

The wholesale trade figures are available in Haver's USECON database.

Wholesale Sector - NAICS Classification (%) Jan Dec Nov Y/Y 2015 2014 2013
Inventories 0.3 -0.0 -0.4 2.0 1.8 6.7 4.1
Sales -1.3 -0.6 -1.3 -6.4 -3.6 4.3 3.0
I/S Ratio 1.35 1.33 1.32 1.28 (Jan. '15) 1.30 1.20 1.18
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