U.S. Business Inventories Ease While Sales Decline in October
by:Tom Moeller
|in:Economy in Brief
Summary
- Wholesale inventories lead total downward.
- Sales fall across industry groupings.
- Business sector inventory-to-sales ratio edges higher.
Total business inventories slipped 0.1% (+0.6% y/y) during October after a 0.2% September gain, revised from a 0.4% increase. The small change is consistent with overall stability since late last year and compares to an unchanged level expected in the Informa Global Markets Survey.
Reported last week, wholesale inventories fell 0.4% in October (-2.3% y/y) after holding steady in September. They have been falling since November 2022. Factory sector inventories rose 0.1% (-0.3% y/y) after rising by the same amount in September. They have been moving sideways since June of last year.
Reported today, retail inventories slipped 0.1% (+5.3% y/y) following a 0.4% September gain. Motor vehicle & parts inventories increased 1.9% in October (23.0% y/y) after a 2.3% September rise. Excluding autos, retail inventories declined 0.9% (-0.8% y/y) following a 0.4% September drop. Clothing & accessory store inventories fell 0.2% (+1.5% y/y) and reversed the prior month’s rise. Food & beverage store inventories eased 0.1% (+1.3% y/y) after a 0.2% gain. General merchandise store inventories declined 1.4% (-2.0% y/y, following a 1.9% fall. Department store inventories fell 1.1% (-8.8% y/y) after declining 1.5% in September. Falling for the eighth consecutive month, furniture, electronics & appliance inventories were off by 0.6% (-9.1% y/y).
Total business sales declined 1.0% (-0.2% y/y) in October and fully reversed the September increase. Merchant wholesale sales fell 1.3% (-0.4% y/y) after two straight 2.0% increases. Factory sector shipments fell 1.4% (-1.6% y/y) following little change in September. Retail sales declined 0.3% (+1.3% y/y) in October after falling 0.3% in September.
As sales fell more than inventories in October, the total I/S ratio rose to 1.37 in October from 1.36 in September. It remained down from 1.40 earlier this year, but above a low of 1.27 in October 2021. The manufacturing I/S ratio rose to 1.48 in October from 1.46 in September. The wholesale I/S ratio was little changed at 1.34 in October, down from a June high of 1.41, while the retail I/S ratio held steady at 1.30, where it’s been since May.
The manufacturing and trade data are in Haver’s USECON database. The Informa Global Markets forecast is in the MMSAMER database.
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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