Haver Analytics
Haver Analytics
USA
| Mar 17 2025

U.S. Business Inventories Rebounded in January but Sales Fell

Summary
  • Inventories rose 0.3% m/m in January after a 0.2% m/m decline in December.
  • January rebound led by wholesalers.
  • In contrast, sales fell 0.8% m/m in January, their first monthly decline in five months.
  • With inventories rising and sales falling, the inventory/sales ratio rose 1.5% m/m.

Total business inventories increased 0.3% m/m (+2.3% y/y) in January, more than reversing a 0.2% monthly decline in December. The Action Economics Forecast Survey had anticipated a 0.3% m/m increase. Manufacturing inventories edged up 0.1% m/m (1.0% y/y), their third consecutive monthly gain. Wholesale inventories rose 0.8% m/m (1.2% y/y), their first monthly increase in five months. Retail inventories were essentially unchanged in January (+5.0% y/y) following a 0.5% m/m decline in December.

Drilling down into retail inventories, auto inventories fell 1.0% (+8.9% y/y), their fourth consecutive monthly decline. Food inventories were unchanged from December (+2.2% y/y). Inventories in all the other major categories increased. Furniture inventories gained 1.1% m/m (-2.9% y/y), their first increase in four months. Clothing inventories jumped 1.4% m/m (3.1% y/y), their first monthly increase in three months. Inventories of building materials increased 0.6% m/m (6.1% y/y), and general merchandise store inventories rose 0.5% m/m (3.9% y/y).

Total business sales fell for the first time in five months, declining 0.8% m/m (+3.5% y/y) in January. Factory shipments (sales) increased 0.4% m/m (3.1% y/y) but wholesale sales fell 1.3% m/m (+3.5% y/y) and retail sales slumped 1.4% m/m (+3.9% y/y). In a separate report also released today, retail sales rebounded in February, rising 0.5% m/m. (Note that these retail sales do not include food service sales.)

With inventories rising in January and sales generally falling, the inventory/sales (I/S) ratio rose 1.5% to 1.37 in January from 1.35 in December. The December reading was the lowest since September 2023. The I/S ratio for wholesalers increased to 1.33 from 1.30, which was the lowest reading since June 2022. The retail I/S ratio rose to 1.32 from 1.30 in December. Excluding autos, the retail I/S ratio increased to 1.15, its highest reading in a year, from 1.13 in December. The I/S ratio for manufacturers was unchanged at 1.46.

The manufacturing and trade data are in Haver’s USECON database. The Action Economics Forecast Survey is in the AS1REPNA database.

  • 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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