U.S. Business Inventory Accumulation Remains Moderate

Total business inventories increased 0.3% (4.4% y/y) during September following an unrevised 0.5% August rise. Total business sales increased 0.4% (6.6% y/y) after a 0.5% gain. The inventory-to-sales ratio held steady at 1.34. It peaked early in 2016 at 1.43.

Retail inventories nudged 0.1% higher (3.1% y/y) in September, following two months of 0.6% increase. Auto inventories improved 0.4% (6.2% y/y) following two months of much stronger gain. Non-auto retail inventories eased for a second month (+1.5% y/y). General merchandise inventories also slipped 0.1% (+0.5% y/y) and offset the August rise. In the department store sector, inventories improved 0.3% (-1.7% y/y) after three months of decline. Building materials inventories held steady (6.7% y/y) after a 0.6% fall, while clothing store inventories were off 0.9% (-5.1% y/y). Inventories of furniture, electronics and appliances strengthened 0.7% (-2.6% y/y) after a 1.3% rise. As reported earlier, wholesale inventories rose 0.4% (5.2% y/y) following a 0.9% increase. Factory sector inventories gained 0.5% (4.8% y/y) after a 0.1% improvement.

Retail sales increased 0.2% (3.8% y/y) in September after a 0.1% dip. Non-auto sales also rose 0.2% (5.1% y/y) following a 0.1% gain. Wholesale sector sales improved 0.2% (7.8% y/y) after a 0.7% rise. Shipments from the factory sector strengthened 0.9% (7.9% y/y) following the 0.7% August gain.

The overall business inventory-to-sales (I/S) ratio held at 1.34 in September. The retail sector ratio also held steady at 1.44, but remained down sharply from the levels averaged during the prior two years. The non-auto I/S ratio also was unchanged at 1.18, its lowest level since early-2012. The ratio peaked at 1.29 early in 2016. The wholesale sector I/S ratio also held steady m/m at 1.26 for the third straight month. The manufacturing sector I/S ratio slipped to 1.33 and remained near the three-year low.

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