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Economy in Brief

U.S. Wholesale Inventories & Sales Decline
by Tom Moeller  June 9, 2017

Inventories at the wholesale level fell 0.5% during April following a 0.1% March uptick, revised from 0.2%. It was the second decline in the last four months, and halved the y/y increase to 1.6%.

Durable goods inventories declined 0.3% (+2.0% y/y) following a 0.6% March rise. Motor vehicle inventories fell 1.4% (+1.0% y/y), but furniture inventories rose 0.2% (4.9% y/y). Inventories of computers and peripherals dropped 1.7% y (+10.5% y/y), while general machinery inventories held steady (-2.9% y/y) following three straight months of decline. Inventories of nondurable goods declined 0.8% (+1.1 % y/y), the third decline in four months. Petroleum inventories fell 5.0% (+16.8% y/y) following a 4.3% liquidation. Chemical inventories eased 0.3% (+2.2% y/y). Apparel inventories held steady (-10.1% y/y), while paper and paper product stockpiles fell 1.8% (-0.4% y/y).

Wholesale sales dropped 0.4% (+7.3% y/y) following a 0.2% decline, revised from no change. A 0.3% rise was expected in the Action Economics Forecast Survey.

Nondurable goods sales were off 1.1% (+7.3% y/y as petroleum sales fell 1.5% (+33.2% y/y). Chemical sales declined 1.9% (+5.5% y/y). Apparel sales dropped 3.7% (-10.1% y/y), the fourth consecutive sharp monthly decline. Sales of paper products rose 0.4% (-1.5% y/y) while grocery product sales increased 0.6% (3.9% y/y). Sales by durable goods wholesalers improved 0.3% (7.3% y/y). Computer sales gained 0.5% (5.5% y/y), but machinery sales fell 0.8% (+5.3% y/y). Electrical equipment sales rose 0.7% (6.5% y/y) while motor vehicle distributors' sales improved 1.3% (7.3% y/y). Furniture sales fell 2.5% (-0.8% y/y), down for the fourth straight month.

Wholesalers' inventory-to-sales ratio held steady at 1.28, down sharply from the 1.36 average in Q1'16.

The durable goods I/S ratio of 1.62 compared to 1.74 in January 2016. The machinery I/S ratio of 2.87 was reduced from 3.11 a year earlier. The motor vehicles ratio of 1.74 declined y/y from 1.85. The furniture I/S ratio of 1.69 was up y/y from 1.60, but the metals ratio eased to 1.90. The I/S ratio of 0.86 in computers and equipment held steady y/y, but declined during the last three months. In the nondurable goods sector, the I/S ratio of 0.96 was sdown from 1.02 a year ago. The petroleum industry ratio of 0.41 compared to 0.47 one year earlier. The ratio in the chemical sector of 1.18 was lower than 1.22 in April 2016.

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

Long-Term Unemployment: Attached and Mismatched? from the Federal Reserve Bank of St. Louis is available here.

Wholesale Sector - NAICS Classification (%) Apr Mar Feb Apr Y/Y 2016 2015 2014
Inventories -0.5 0.1 0.3 1.6 2.6 1.1 5.8
Sales -0.4 -0.2 0.7 7.3 -0.5 -4.9 3.6
I/S Ratio 1.28 1.28 1.28 1.35 (Apr. '16) 1.33 1.32 1.21
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