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Economy in Brief

Business Inventories Rise
by Tom Moeller  October 14, 2016

Total business inventories increased 0.2% during August (0.7% y/y) following an unrevised little change in July. Total business sales also increased 0.2%, and were little changed y/y. The inventory-to-sales ratio remained stable at 1.39, down sharply from where it was during Q1.

New data in this report was that retail inventories jumped 0.6% (4.8% y/y) following a 0.2% decline. The rise was powered by a 1.2% surge (10.2% y/y) in motor vehicle inventories. Excluding autos, inventories worked 0.3% higher (2.1% y/y). That gain reflected a 0.5% rise in furniture inventories, but they were little changed y/y. Building material inventories grew 0.7% (4.4% y/y), but clothing inventories rose just 0.2% (1.8% y/y). Food & beverage store inventories gained 0.2% (2.4% y/y), but general merchandise store inventories fell 0.3% (-1.5% y/y). As reported earlier, wholesale inventories declined 0.2% (-0.1% y/y) while factory inventories were up 0.2% (-2.2% y/y).

Business sales increased 0.2% in August (-0.0% y/y) after a 0.3% decline. Merchant wholesale sales led the way higher with a 0.7% increase (0.6% y/y) following a 0.6% decline. Factory sector shipments remained steady (-2.0% y/y) after a 0.4% decline, and retail sales fell 0.3% (+1.6% y/y) after a 0.1% uptick.

The overall business inventory-to-sales ratio remained steady m/m at 1.39, though that was up from 1.38 one year earlier. The retail I/S ratio rose to 1.51, its highest level since March, while the ratio excluding autos also nudged up to 1.28. That still was down from 1.30 six months ago. The wholesale sector I/S ratio eased to 1.33, while it rose to 1.36 in the factory sector.

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

Manufacturing & Trade Aug Jul Jun Aug Y/Y 2015 2014 2013
Business Inventories (% chg) 0.2 -0.0 0.2 0.7 1.3 3.7 3.9
 Retail 0.6 -0.2 0.4 4.8 5.3 3.1 7.4
  Retail excl. Motor Vehicles 0.3 -0.4 0.2 2.1 4.1 2.6 4.8
 Merchant Wholesalers -0.2 -0.1 0.3 -0.1 1.9 6.5 4.0
 Manufacturing 0.2 0.2 -0.0 -2.2 -2.6 1.8 1.0
Business Sales (% chg)
Total 0.2 -0.3 1.0 -0.0 -2.6 2.8 2.9
 Retail -0.3 0.1 0.8 1.6 1.6 3.9 3.8
  Retail excl. Motor Vehicles -0.3 -0.4 0.8 2.9 0.2 3.2 2.6
 Merchant Wholesalers 0.7 -0.6 1.7 0.6 -4.3 3.6 3.1
 Manufacturing 0.0 -0.4 0.6 -2.0 -4.4 1.2 2.1
I/S Ratio
Total 1.39 1.39 1.39 1.38 1.38 1.31 1.29
 Retail 1.51 1.49 1.50 1.46 1.46 1.43 1.41
  Retail excl. Motor Vehicles 1.28 1.27 1.27 1.27 1.27 1.24 1.23
 Merchant Wholesalers 1.33 1.34 1.33 1.34 1.32 1.21 1.18
 Manufacturing 1.36 1.35 1.35 1.36 1.36 1.31 1.30
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