U.S. Business Inventories and Sales Rose in June
by:Sandy Batten
|in:Economy in Brief
Summary
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Inventories continued to build, but slightly more slowly.
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Sales growth picked up.
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Inventory-to-sales ratio unchanged.
Total business inventories rose 1.4% m/m (+18.5% y/y) in June, down slightly from a 1.6% m/m increase in May. A 1.4% gain had been expected in the Informa Global Markets Survey. Business sales rose 1.3% (+14.5% y/y) in June following a 1.0% monthly increase in May. The inventory-to-sales ratio was unchanged at 1.30, still quite low by historical standards but up from its most recent low of 1.26, last reached in last November.
Retail inventories led the overall June build. They were up 2.0%% m/m (+19.8% y/y) following a 1.6% monthly gain in May. In the retail sector, motor vehicle inventories jumped up 3.3% m/m in June on top of a 2.4% increase in May. Department store inventories increased 2.5% m/m after a 1.6% m/m rise in May. Clothing inventories gained 2.2% m/m versus 1.6% in May. Wholesale inventories followed close behind retail in June, posting a 1.8% m/m (+25.5% y/y) increase in June after a 1.9% monthly rise in May. Factory inventories rose a more modest 0.4% m/m (+10.5% y/y) in June, down from a 1.3% monthly gain in May.
The gain in total business sales in June was led by wholesalers. Their sales rose 1.8% m/m (+20.4% y/y) following a 0.7% monthly gain in May. Factory shipments slowed to a 1.1% increase (+14.8% y/y) after a 2.1% m/m rise in May. Retail sales increased 0.8% m/m (+7.9% y/y) in June, up from a 0.3% monthly rise in May. (In a separate report this morning, retail sales were unchanged in July from June, largely reflecting declines in motor vehicle and gasoline sales.)
With inventories increasing at about the same pace as sales, the overall inventory-to-sales ratio was unchanged at 1.30 in June from May. The retail sector I/S ratio edged up to 1.21 from 1.20 in May. Excluding motor vehicle inventories from retail, that I/S ratio was unchanged at 1.16 in June. The factory I/S ratio slipped to 1.45 in June from 1.46 while the wholesale I/S ratio was unchanged at 1.26.
The manufacturing and trade data are in Haver's USECON database.
Sandy Batten
AuthorMore in Author Profile »Sandy Batten has more than 30 years of experience analyzing industrial economies and financial markets and a wide range of experience across the financial services sector, government, and academia. Before joining Haver Analytics, Sandy was a Vice President and Senior Economist at Citibank; Senior Credit Market Analyst at CDC Investment Management, Managing Director at Bear Stearns, and Executive Director at JPMorgan. In 2008, Sandy was named the most accurate US forecaster by the National Association for Business Economics. He is a member of the New York Forecasters Club, NABE, and the American Economic Association. Prior to his time in the financial services sector, Sandy was a Research Officer at the Federal Reserve Bank of St. Louis, Senior Staff Economist on the President’s Council of Economic Advisors, Deputy Assistant Secretary for Economic Policy at the US Treasury, and Economist at the International Monetary Fund. Sandy has taught economics at St. Louis University, Denison University, and Muskingun College. He has published numerous peer-reviewed articles in a wide range of academic publications. He has a B.A. in economics from the University of Richmond and a M.A. and Ph.D. in economics from The Ohio State University.
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