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Economy in Brief

Business Inventories Weaker in April, But Sales Jump
by Sandy Batten  June 14, 2016

Total business inventories inched up 0.1% m/m (1.0% y/y) in April following a 0.3% m/m increase in March (revised down from 0.4% m/m). Total business sales jumped 0.9% m/m (-1.3% y/y) in April after a 0.2% m/m rise in March (revised from 0.3%). The April sales increase was the largest monthly gain since February 2014.

The new information in today's release was for retail inventories. Manufacturing and wholesale inventories had already been reported. Manufacturing inventories were down 0.1% in April (their tenth consecutive monthly decline) while wholesale inventories were up 0.6% m/m, their second consecutive monthly increase following five consecutive monthly declines.

Retail inventories unexpectedly slipped 0.1% m/m in April after having posted gains in each of the ten preceding months. Recent increases had been substantial-0.9% m/m in March and 0.7% m/m in February. In April, retail inventories excluding motor vehicles and parts fell 0.2% m/m with widespread declines across major categories. Furniture inventories fell 0.5% m/m. Building materials inventories were down 0.2% m/m. And inventories of general merchandise stores declined 0.5% m/m.

Sales were up across all sectors in April. Retail sales jumped 1.4% m/m (up 0.9% m/m when motor vehicles are excluded). Wholesale sales climbed 1.0% m/m in April, their second consecutive significant increase after four consecutive monthly declines. Manufacturing sales were up 0.5% m/m in April, their second consecutive monthly increase following three consecutive monthly declines.

The inventory-to-sales ratio in the business sector edged down to 1.40 in April from 1.41 in February and March. The February/March reading had been the highest since the economy exited recession in 2009. Inventory-to-sales ratios also retreated slightly in each of the individual sectors-again from levels that were the highest in the current economic expansion.

The manufacturing and trade data are in Haver's USECON database.

Manufacturing & Trade Apr Mar Feb Apr Y/Y 2015 2014 2013
Business Inventories (% chg) 0.1 0.3 -0.1 1.0 1.3 3.7 3.9
 Retail -0.1 0.9 0.7 5.4 5.3 3.1 7.4
  Retail excl. Motor Vehicles -0.2 0.1 0.2 2.8 4.1 2.6 4.8
 Merchant Wholesalers 0.6 0.2 -0.6 0.9 1.9 6.5 4.0
 Manufacturing -0.1 -0.1 -0.4 -3.0 -2.6 1.8 1.0
Business Sales (% chg)
Total 0.9 0.2 -0.3 -1.3 -2.6 2.8 2.9
 Retail 1.4 -0.3 0.0 2.6 1.6 3.9 3.8
  Retail excl. Motor Vehicles 0.9 0.5 -0.1 2.5 0.2 3.2 2.6
 Merchant Wholesalers 1.0 0.6 -0.2 -2.6 -4.3 3.6 3.1
 Manufacturing 0.5 0.3 -0.6 -3.4 -4.4 1.2 2.1
I/S Ratio
Total 1.40 1.41 1.41 1.37 1.38 1.31 1.29
 Retail 1.50 1.52 1.50 1.46 1.46 1.43 1.41
  Retail excl. Motor Vehicles 1.28 1.29 1.30 1.27 1.27 1.24 1.23
 Merchant Wholesalers 1.35 1.36 1.36 1.31 1.32 1.21 1.18
 Manufacturing 1.36 1.37 1.37 1.35 1.36 1.31 1.30
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