U.S. Business Inventories Rose While Sales Fell in November
by:Sandy Batten
|in:Economy in Brief
Summary
- Inventories continued to increase.
- Sales posted first decline since July.
- Inventory-to-sales ratio rose to highest in nearly two years.
Total business inventories rose 0.4% m/m (15.1% y/y) in November following 0.2% monthly increases in both September and October. A 0.4% gain had been expected by the Informa Global Markets Survey. Business sales fell 0.8% mm/m (+7.4% y/y), their first monthly decline in four months. The annual pace was the slowest since February 2021. With sales falling while inventories rose, the inventory-to-sales ratio rose to 1.35 in November, its highest level since December 2020, up from 1.33 in October and well above the recent low of 1.25 reached in October 2021.
Retail inventories increased 0.1% m/m in November, their first increase in three months, following a 0.4% monthly decline in October. Motor vehicle inventories increased 1.1% m/m in November after a 0.4% rise in October. Excluding autos, the remainder of inventories slumped 0.3% m/m in November, their third consecutive monthly decline with falls relatively widely spread across sectors. Inventories at furniture, home furnishings, and electronics and appliances stores declined 1.7% m/m in November, their fifth consecutive monthly decline. Inventories at general merchandise stores fell 1.0% m/m in November on top of a 2.7% monthly decline in October and a 4.3% monthly fall in September.
Wholesale inventories gained 1.0% m/m in November after 0.6% monthly increases in both September and October. Manufacturing inventories were unchanged in November following a 0.1% m/m increase in October.
Retail sales slumped 1.1% m/m in November and were reported in a separate release this morning to have fallen 1.2% m/m in December, indicating a very weak holiday selling season. Wholesale sales declined 0.6% m/m in November after having been essentially unchanged in October. Factory shipments declined 0.6% m/m in November, their first decline in four months.
The increase in inventories along with the fall in sales drove up the inventory-to-sales ratio to 1.35 in November, its highest since December 2020. The retail I/S rose to 1.24 from 1.22. The wholesale I/S increased to 1.35 in November, its highest since June 2020, from 1.32 in October. The manufacturing I/S edged up to 1.47 in November from 1.46 in October.
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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