U.S. Business Inventories Rose While Sales Fell in August
by:Sandy Batten
|in:Economy in Brief
Summary
- Inventories increased 0.3%, led by retailers.
- Sales declined, led by factory sales.
- Inventory/sales ratio stuck in a range.
Total business inventories rose 0.3% m/m (2.4% y/y) in August, the same monthly increase as in June and July. A 0.3% increase had been expected in the Informa Global Markets Survey.
Retail inventories rose 0.6% m/m (6.4% y/y) in August, slightly slower than the 0.8% monthly gain in July. Increased auto inventories continued to be the major contributor to the rise in overall inventories in August. While the 0.8% m/m increase in auto inventories was the lowest monthly increase in six months, it accounted for 44% of the monthly increase in total inventories. General merchandise inventories were up 1.3% m/m, their largest monthly gain since December 2023. Food and beverage store inventories rose 1.2% m/m in August, their largest monthly gain since October 2022. By contrast, furniture inventories fell 0.5% m/m, their fourth consecutive monthly decline.
Manufacturing inventories edged up 0.1% m/m (0.6% y/y) in August after having been unchanged in July. Wholesale inventories also increased 0.1% m/m (0.6% y/y) in August versus a 0.2% monthly gain in July.
Total business sales fell 0.2% m/m (+1.3% y/y) in August after a 1.1% m/m jump in July. Factory sales fell 0.5% (+1.0% y/y); wholesale sales slipped 0.1% m/m (+1.1% y/y). Retail sales were essentially unchanged (+1.9% y/y) with weakness widespread across major sectors.
With sales falling and inventories rising in August, the inventory/sales (I/S) ratio edged up to 1.38 from 1.37 in July, It has been either 1.37 or 1.38 in each of the past nine months. The manufacturing I/S ratio inched up to 1.46 in August from 1.45. The wholesale I/S was unchanged at 1.35. And the retail I/S increased to 1.33 from 1.32 in July.
The manufacturing and trade data are in Haver’s USECON database. The Informa Global Markets forecast is in the MMSAMER 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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