U.S. Wholesale Inventories & Sales Increase in May

Wholesale inventories increased 0.6% (-0.5% y/y) during May after rising 0.2% in April. The May figure was unrevised from the advance report. It was the largest monthly increase since November 2022. Growth has turned positive this year following the decumulation during 2023. The latest increase matched expectations in the Informa Global Markets Survey.

In May, durable goods inventories rose 0.6% (2.6% y/y) after increasing 0.5% in April. The value of motor vehicles & parts inventories surged 1.4% (11.6% y/y). Machinery inventories strengthened 0.9% (13.9% y/y). Professional & commercial equipment inventories rose 0.7% (1.3% y/y), even with a 0.1% slip (+6.7% y/y) in inventories of computer equipment. Electrical & electronic goods held steady (-4.4% y/y) but furniture inventories weakened 0.3% (-7.7% y/y). Metals inventories declined 0.7% (-12.0% y/y). Inventories of lumber & other construction materials slipped 0.1% (+2.3% y/y).

Nondurable wholesale goods inventories strengthened 0.7% (-5.7% y/y) in May, following constant declines since late in 2022. Farm product inventories increased 5.2% (-20.2% y/y) while grocery product inventories rose 0.4% (-5.4% y/y). Chemical inventories increased 0.8% (-9.2% y/y). Working lower, inventories of petroleum & products fell 6.4% (-10.3% y/y) while paper & paper product inventories declined 0.8% (-11.5% y/y).

Wholesale sales of merchandise rose 0.4% (1.9% y/y) in May after a 0.2% April gain. A 0.3% rise had been expected in the Action Economics Forecast Survey.

Durable goods sales rose 0.4% in May (1.4% y/y) after a 0.3% April rise. Electrical equipment sales strengthened 3.6% (8.3% y/y). Professional equipment sales increased 0.2% (2.4% y/y) with a 0.8% rise (-1.5% y/y) in computer equipment purchases. Hardware sales increased 1.1% (5.5% y/y) while sales of machinery edged 0.1% higher (-0.8% y/y). Working lower, motor vehicle sales declined 1.0% (+4.0% y/y) and furniture sales were off 3.0% (-8.5% y/y). Metals & minerals sales declined 1.3% (-9.8% y/y).

Among nondurable goods wholesalers, sales improved 0.4% in May (2.3% y/y) after rising 0.1% in April. Grocery product sales increased 1.1% (4.0% y/y) but farm product sales were off 2.6% (-21.6% y/y. Petroleum sales rose 0.4% (7.6% y/y) and apparel purchases held steady (+5.9% y/y). Moving lower, paper & product sales declined 0.3% (-1.3% y/y) and chemical sales weakened 0.7% (-0.8% y/y).

The wholesale inventory/sales ratio (I/S) held steady at 1.35 in May where it has been for three straight months. For durable goods, the I/S ratio of 1.83 in May was unchanged, while the nondurable goods I/S ratio edged up to 0.93 from 0.92 in April.

The wholesale trade figures are compiled by the U.S. Census Bureau and are available in Haver’s USECON database. The expectations figure for total inventories is contained in the MMSAMER database, and the sales expectations figure is in the AS1REPNA database.

Semiannual Monetary Policy Report to the Congress by Fed Chair Jerome H. Powell is available here.