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Economy in Brief

U.S. Wholesale Inventories Decline; Sales Increase
by Tom Moeller  December 9, 2016

Inventories at the wholesale level fell 0.4% (-0.4% y/y) during October following an unrevised 0.1% September rise. The advance report had indicated a 0.6% October decline. Inventories of durable goods declined 0.3% (-2.2% y/y) after a 0.3% fall. Motor vehicle inventories improved 0.3% (- 1.8% y/y), while furniture inventories rose 1.6% (3.0% y/y). Computer equipment stockpiles declined 0.3% (-0.6% y/y) and machinery inventories were off 1.0% (-1.4% y/y). Inventories of nondurable products fell 0.4% (+2.5% y/y) after a 1.1% jump. Petroleum inventories strengthened 1.9% (12.2% y/y) with higher prices, but chemical stockpiles fell 1.1% (-2.0% y/y). Apparel inventories rose 0.3% (-4.4% y/y).

Wholesale sales strengthened 1.4% (2.2% y/y) following a 0.4% increase. A 0.6% rise was expected in the Action Economics Forecast Survey. Nondurable goods sales improved 1.6% (1.9% y/y) as petroleum sales surged 6.6% (7.5% y/y) with higher prices. Chemical sales increased 2.4% (4.5% y/y), but apparel sales eased 0.1% (-2.9% y/y). Sales of durable goods improved 1.1% (2.5% y/y) as electrical product sales jumped 2.2% (4.3% y/y), and metals sales surged 2.0% (-0.9% y/y). Motor vehicle sales improved 0.1% (1.3% y/y), but computer equipment sales fell 2.3% (-5.8% y/y).

The inventory-to-sales ratio eased to 1.30, and remained lower than January's 1.37 peak. The durable goods ratio declined to 1.63 and was down y/y from 1.71.The machinery I/S ratio eased y/y to 2.99, while the motor vehicles ratio eased y/y to 1.75 from 1.80 last year. The computer industry's I/S ratio increased y/y to 0.85 from 0.81. In the nondurable goods sector, the I/S ratio of 1.00 was little changed y/y. The chemical sector's ratio of 1.19 was down sharply y/y. In the petroleum area, the I/S ratio of 0.43 compared to 0.32 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 (%) Oct Sep Aug Y/Y 2015 2014 2013
Inventories -0.4 0.1 -0.1 -0.4 1.8 6.4 3.8
Sales 1.4 0.4 0.7 2.2 -4.3 3.6 3.0
I/S Ratio 1.30 1.32 1.33 1.33 (Oct. '15) 1.32 1.21 1.18
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