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Economy in Brief

U.S. Business Inventory Accumulation Continues; Sales Strengthen
by Tom Moeller  June 14, 2018

Total business inventories increased 0.3% (4.4% y/y) during April following a 0.1% March slip. Total business sales rose 0.4% (6.7% y/y), following a 0.6% gain. The inventory-to-sales ratio held steady at 1.35. It peaked early in 2016 at 1.43.

Retail inventories increased 0.5% (2.5% y/y) in April after a 0.7% decline during March. Auto inventories grew 0.7% (1.9% y/y) after a 0.9% fall. Non-auto retail inventories increased 0.4% (2.8% y/y) following a 0.6% decline. General merchandise inventories rose 0.8% (-0.6% y/y) after a 1.9% shortfall. In the department store sector, inventories edged 0.5% higher (-4.9% y/y) following a 1.2% drop. Building materials inventories gained 0.5% (5.7% y/y) after a 0.2% rise, while clothing store inventories rose 0.4% (0.6% y/y) after falling 0.6%. Inventories of furniture, electronics and appliances declined 0.3% (+1.4% y/y), the fifth decline in seven months. As reported last week, wholesale inventories edged 0.1% higher (5.8% y/y) following a 0.2% rise. Factory sector inventories rose 0.3% (5.0% y/y) following a 0.2% gain.

Retail sales increased 0.4% in April (4.9% y/y) with non-auto sales up 0.5% (5.2% y/y). Wholesale sector sales increased 0.8% (7.8% y/y) after improving 0.4%. Shipments from the factory sector held steady (7.2% y/y) following a 0.7% rise.

The inventory-to-sales (I/S) ratio in the retail sector held steady at 1.44 in April, down from the levels averaged during the prior two years. The non-auto I/S ratio held steady at 1.21 and remained near its lowest level since early-2012. The wholesale sector I/S ratio eased to 1.28, nearly its lowest level since December 2014. The manufacturing sector I/S ratio held steady at 1.35, its lowest point in three years.

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

Manufacturing & Trade Apr Mar Feb Apr Y/Y 2017 2016 2015
Business Inventories (% chg) 0.3 -0.1 0.6 4.4 3.5 1.8 1.7
 Retail 0.5 -0.7 0.6 2.5 2.4 4.1 4.9
  Retail excl. Motor Vehicles 0.4 -0.6 0.4 2.8 2.3 1.9 3.9
 Merchant Wholesalers 0.1 0.2 0.8 5.8 3.6 2.2 1.2
 Manufacturing 0.3 0.2 0.3 5.0 4.5 -0.7 -0.8
Business Sales (% chg)
Total 0.4 0.6 0.4 6.7 5.8 -0.8 -3.4
 Retail 0.4 0.7 0.1 4.9 4.9 2.5 1.9
  Retail excl. Motor Vehicles 0.5 0.3 0.4 5.2 4.9 2.0 0.4
 Merchant Wholesalers 0.8 0.4 0.9 7.8 7.4 -1.3 -4.9
 Manufacturing 0.0 0.7 0.2 7.2 5.0 -3.2 -6.2
I/S Ratio
Total 1.35 1.35 1.36 1.38 1.38 1.42 1.39
 Retail 1.44 1.44 1.46 1.47 1.47 1.49 1.46
  Retail excl. Motor Vehicles 1.21 1.21 1.22 1.24 1.24 1.28 1.27
 Merchant Wholesalers 1.28 1.29 1.29 1.30 1.29 1.35 1.33
 Manufacturing 1.35 1.35 1.36 1.38 1.37 1.41 1.39
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