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Economy in Brief

Wholesale Inventories Surge
by Tom Moeller  January 11, 2017

Inventories at the wholesale level jumped 1.0% (1.6% y/y) during November following a revised -0.1% dip, initially reported as -0.4%. The advance report indicated a 1.3% November increase. Inventories of durable goods increased 1.0% (-0.3% y/y) after a 0.1% uptick. Motor vehicle inventories surged 3.2% (2.5% y/y), while furniture inventories rose 0.1% (3.7% y/y). Computer equipment stockpiles strengthened 2.0% (2.0% y/y), but machinery inventories were off 0.2% (-1.7% y/y). Inventories of nondurable products also strengthened 1.0% (4.1% y/y) after a 0.4% decline. Petroleum inventories increased 2.7% (10.9% y/y) while chemical stockpiles increased 0.9% (-0.8% y/y). Inventories of paper posted a 0.9% increase (3.4% y/y), but apparel inventories eased 0.5% (-4.0% y/y).

Wholesale sales increased 0.4% (3.4% y/y) after a 1.1% rise, initially reported as 1.4%. A 0.4% rise was expected in the Action Economics Forecast Survey. Nondurable goods sales improved 0.4% (4.3% y/y), but petroleum sales fell 3.5% (+9.2% y/y) following their 4.8% surge. Chemical sales increased 1.4% (4.8% y/y), but apparel sales declined 3.0% (-5.9% y/y). Sales of durable goods improved 0.4% (2.3% y/y) while electrical product sales declined 2.4% (-0.9% y/y). Metals sales increased 0.9% (-0.6% y/y). Motor vehicle sales improved 0.5% (2.3% y/y), and computer equipment sales rose 0.6% (-3.8% y/y).

The inventory-to-sales ratio of 1.32 remained lower than January's 1.37 peak. The durable goods ratio of 1.65 was down from the 1.72 around the middle of last year. The machinery I/S ratio eased y/y to 2.94, but the motor vehicles ratio remained steady y/y at 1.80. The computer industry's I/S ratio jumped to 0.86 from 0.79 in June. The electrical equipment industry's I/S ratio fell to 1.01 from its 1.08 peak during March of 2015. In the nondurable goods sector, the I/S ratio of 1.01 was down from 1.06 in February 2016. The chemical sector's ratio of 1.18 was down sharply y/y. In the petroleum sector, the I/S ratio of 0.47 compared to 0.57 nine months earlier.

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

Wholesale Sector - NAICS Classification (%) Nov Oct Sep Nov Y/Y 2015 2014 2013
Inventories 1.0 -0.1 0.1 1.6 1.8 6.4 3.8
Sales 0.4 1.1 0.4 3.4 -4.3 3.6 3.0
I/S Ratio 1.32 1.31 1.32 1.34 (Nov '15) 1.32 1.21 1.18
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