U.S. Wholesale Inventories & Sales Post Strong Gains in February
by:Tom Moeller
|in:Economy in Brief
Summary
- Wholesale inventories recover January decline.
- February sales surge.
- The I/S ratio drops to four-month low.
Wholesale inventories rose 0.5% (-1.5% y/y) during February after falling 0.2% in January. It was only the second monthly rise in inventories since November 2022. The rise matched expectations in the Informa Global Markets Survey.
In February, durable goods inventories rose 1.0% (2.6% y/y) after rising 0.4% in January. The value of machinery inventories jumped 2.1% (16.3% y/y) while motor vehicles & parts inventories rose 0.9% (12.1% y/y). Professional & commercial equipment inventories increased 0.7% (-0.2% y/y) including a 0.2% gain (-1.4% y/y) in inventories of computer equipment. Electrical & electronic goods edged up 0.1% (-5.9% y/y), and metals inventories rose 0.5% (-6.8% y/y). Furniture inventories rose 0.2% (-10.7% y/y).
Nondurable wholesale goods inventories eased 0.3% (-8.0% y/y) in February. Paper & product inventories fell 0.7% (-16.3% y/y) and grocery products eased 0.5% (-5.3% y/y) Inventories of petroleum & products were off 3.6% (-20.9% y/y) while farm product inventories declined 3.9% (-29.2% y/y). To the upside, apparel and associated items inventories rose 1.3% (-21.0% y/y) and chemicals & products inventories also rose 1.3% (-10.8% y/y).
Wholesale sales of merchandise rose 2.3% (0.8% y/y) in February after falling 1.4% in January. A 0.5% rise had been expected in the Action Economics Forecast Survey.
Durable goods sales rose 1.6% (0.4% y/y) as motor vehicle & parts sales increased 1.0% (7.1% y/y). Professional equipment sales increased 1.1% (0.6% y/y) with a 0.2% rise (-4.2% y/y) in computers. Electrical machinery sales rose 2.1% (2.6% y/y) and machinery sales increased 1.2% (-3.1% y/y). Working lower, furniture & home furnishings sales fell 2.8% (-2.9% y/y). Metals & minerals sales declined 0.7% (-9.1% y/y).
Among nondurable goods wholesalers, sales rose 3.0% in February (1.2% y/y). Petroleum sales increased 5.9% (5.3% y/y). Paper & product sales rose 1.6% (-6.3% y/y) and apparel sales rose 0.7% (-5.0% y/y). Chemical sales held steady (-2.5% y/y) while apparel sales increased 0.7% (-5.0% y/y).
The wholesale inventory/sales ratio (I/S) fell to 1.34 in February from 1.36 in January. For durable goods, the I/S ratio was 1.80 in December, down from 1.81 in January. The nondurable goods I/S ratio was 0.92 following three straight 0.95 readings.
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.
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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