- Egypt: IP (Feb)
- US: Regional Payroll Employment (Mar)
- US: GDP by Industry (Q4)
- Realtors Confidence Index Survey (Mar)
- US: Existing Home Sales (Mar)
- Manufacturing Survey - Markit US (Flash - Mar), Composite and Services Survey - Markit US (Flash - Mar)
- Mexico: National Employment Survey(Mar)
- *Switzerland: House Price Index - Rebased to Q1-2000=100 (Q1)*
- more updates...
Economy in Brief
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U.S. Initial Unemployment Insurance Applications Increase
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by Sandy Batten April 14, 2017
Business sales rose 0.2% m/m (7.1% y/y) in February versus a 0.3% monthly gain in January. For the major sectors, retail sales slipped 0.3% m/m (5.3% y/y) in February while both wholesale sales and manufacturing shipments increased. Wholesale sales jumped 0.6% m/m (9.9% y/y) while manufacturing shipments rose a solid 0.3% m/m (5.9% y/y).
Total business inventories rose slightly more than did sales in February, increasing 0.3% m/m (2.8% y/y), the same monthly gain as in January. The February increase was generally in line with market expectations. Retail inventories also rose 0.3% m/m (3.8% y/y) in February. Wholesale inventories were up 0.4% m/m (3.2% y/y), while manufacturing inventories increased 0.2% m/m (1.3% y/y).
The real story for the outlook for production continues to be the longer-term acceleration of both sales and inventories, and particularly the more rapid acceleration of sales. Sales have risen at an 11.0% annual rate over the past three months, at an 8.9% annual rate over the past six months and 7.1% over the past year. Inventories have also accelerated, but more modestly. They are up at a 4.0% annual rate over the past three months, at a 3.4% annual rate over the past six months and 2.8% over the past year. This same phenomenon is occurring in each of the three major sectors, though the sales-inventories gap is smaller and narrowing in the retail sector.
Faster growth in sales relative to inventories reduces the inventory-to-sales ratio. Indeed the total business I/S ratio has fallen steadily over the past year and the latest reading (1.35) is the lowest since December 2014. The wholesale and manufacturing I/S ratios have exhibited behavior similar to the total while the retail I/S ratio has edged up over the past two months, but remains below levels of a year ago.
This outpacing of sales relative to inventories depletes merchandise on sellers' shelves and eventually leads to new orders which then lead to increased production. This is a virtuous spiral that is occurring at all levels of business and augurs increased industrial activity in the future.
The manufacturing and trade data are in Haver's USECON database.
|Manufacturing & Trade||Feb||Jan||Dec||Feb Y/Y||2016||2015||2014|
|Business Inventories (% chg)||0.3||0.3||0.3||2.8||2.0||1.1||3.5|
|Retail excl. Motor Vehicles||0.0||0.0||0.3||1.0||1.3||4.0||2.6|
|Business Sales (% chg)|
|Retail excl. Motor Vehicles||0.1||1.0||0.7||5.9||2.4||0.2||3.2|
|Retail excl. Motor Vehicles||1.24||1.24||1.25||1.30||1.27||1.27||1.24|