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Economy in Brief

U.S. Wholesale Inventories Decline; Sales Jump
by Tom Moeller  October 7, 2016

Inventories at the wholesale level fell 0.2% (-0.1% y/y) during August after a 0.1% easing in July, revised from no change. The advance report had indicated a 0.1% August dip. Inventories of durable goods rose 0.2% (-1.9% y/y) after a 0.3% rise. Motor vehicle inventories gained 0.7% (0.3% y/y) while furniture inventories rose 0.4% (1.4% y/y). Computer equipment jumped 1.9% (-3.5% y/y) and machinery inventories gained 0.1% (-15.3% y/y). Inventories of nondurable products fell 0.7% (+2.8% y/y) after a 0.8% decline. Apparel inventories declined 2.1% (-1.2% y/y) and offset a 2.4% rise in petroleum (+4.0% y/y).

Wholesale sales increased 0.7% (0.6% y/y) following a 0.6% fall. No change was expected in the Action Economics Forecast Survey. Sales of nondurable goods jumped 2.0% (0.5% y/y) as farm product sales surged 6.7% (10.0% y/y). Petroleum sales increased 2.0% (-8.1% y/y), while apparel sales increased 2.4% (0.3% y/y). Durable goods sales declined 0.5% (+0.7% y/y). Motor vehicle sales increased 1.4% (-1.6% y/y), but machinery sales declined 2.7% (-1.3% y/y). Computer equipment sales were off 1.6% (-2.0% y/y) and electrical product sales fell 0.4% (+2.2% y/y).

The inventory-to-sales ratio declined to 1.33 from 1.34. These ratios remained lower than January's 1.37 peak. The durable goods ratio rose to 1.67, but was down y/y from 1.72. The machinery I/S ratio was stable y/y at 3.08, but the motor vehicles ratio rose y/y to 1.82. The computer industry's I/S ratio also was stable at 0.83. In the nondurable goods sector, the I/S ratio of 1.01 was up from 0.87 in all of 2014. The chemical sector's ratio of 1.26 compared to 1.13 in 2014. In the petroleum area, the I/S ratio of 0.47 compared to 0.33 two years ago.

The wholesale trade figures are available in Haver's USECON database. The Action Economic Survey results are contained in AS1REPNA.

Wholesale Sector - NAICS Classification (%) Aug Jul Jun Y/Y 2015 2014 2013
Inventories -0.2 -0.1 0.3 -0.1 1.8 6.4 3.8
Sales 0.7 -0.6 1.7 0.6 -4.3 3.6 3.0
I/S Ratio 1.33 1.34 1.33 1.34 (Aug '15) 1.32 1.21 1.18
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