U.S. Wholesale Inventories Continue Their Ascent in May
Summary
• Wholesale inventories continue to rise in May but at a softer pace than in the three preceding months.
• Wholesale sales were mixed.
• Inventory-to-sales ratio was little changed in May.
Wholesale inventories rose 1.8% m/m (24.7% y/y) in May compared to a rise of 2.0% in the advance estimate. Inventories rose 2.3% m/m (24.1% y/y) in April. The Informa Global Markets Survey expected a rise of 2.0% in May. Durable goods inventories rose 1.8% m/m (26.0% y/y) in May, following a 2.3% m/m (25.4% y/y) rise in April. Inventories in several industries contributed to the monthly rise. Motor vehicle and motor vehicle parts and supplies inventories rose 1.8% m/m (16.6% y/y), furniture & home furnishings inventories rose 3.5% m/m (47.1% y/y), inventories for metals and minerals excluding petroleum rose 2.5% m/m (39.4% y/y), electrical equipment inventories also rose 2.5% m/m (35.8% y/y) and hardware, plumbing equipment rose 2.8% m/m (38.2% y/y).
In the nondurable goods sector, inventories rose 1.8% m/m (22.8% y/y), following a rise of 2.3% m/m (22.3% y/y) in April, with petroleum & petroleum products inventories leading the way with a rise of 5.3% m/m (35.9% y/y), followed by apparel inventories rising 3.4% m/m (49.3% y/y).
Wholesale sales increased 0.5% m/m (20.9% y/y) in May, following a 0.8% m/m (21.0 y/y) rise in April. The Action Economics Forecast Survey called for a 0.7% rise in May. Durable goods sales dropped 0.7% m/m (13.1% y/y) after a 0.3% m/m (15.8% y/y) rise in April. Motor vehicle and motor vehicle parts and supplies sales drove the decline with a monthly drop of 3.1% (2.4% y/y), followed by a decline of 0.6% m/m (21.0% y/y) in furniture & home furnishings sales. Sales of machinery partially offset these declines with a 1.9% m/m (15.6% y/y) rise in May.
Sales of nondurable goods gained 1.6% m/m (28.5% y/y) in May, after a 1.2% m/m (26.0% y/y) rise in April. The sales were led by a rise in chemical and allied products sales of 3.0% m/m (27.4% y/y) and in petroleum & petroleum products sales of 2.1% m/m (71.1% y/y).
The inventory-to-sales (I/S) ratio rose ever so slightly to 1.26 in May from 1.25 in April. The durable goods I/S ratio rose to 1.64 in May from 1.60 in April, while the I/S ratio for non-durable goods held steady at 0.93.
The wholesale trade figures are available in Haver's USECON database. The expectations figure for inventories is contained in the MMSAMER database. Expectations for sales are in the AS1REPNA database.
Kathleen Stephansen, CBE
AuthorMore in Author Profile »Kathleen Stephansen is a Senior Economist for Haver Analytics and an Independent Trustee for the EQAT/VIP/1290 Trust Funds, encompassing the US mutual funds sponsored by the Equitable Life Insurance Company. She is a former Chief Economist of Huawei Technologies USA, Senior Economic Advisor to the Boston Consulting Group, Chief Economist of the American International Group (AIG) and AIG Asset Management’s Senior Strategist and Global Head of Sovereign Research. Prior to joining AIG in 2010, Kathleen held various positions as Chief Economist or Head of Global Research at Aladdin Capital Holdings, Credit Suisse and Donaldson, Lufkin and Jenrette Securities Corporation.
Kathleen serves on the boards of the Global Interdependence Center (GIC), as Vice-Chair of the GIC College of Central Bankers, is the Treasurer for Economists for Peace and Security (EPS) and is a former board member of the National Association of Business Economics (NABE). She is a member of Chatham House and the Economic Club of New York. She holds an undergraduate degree in economics from the Universite Catholique de Louvain and graduate degrees in economics from the University of New Hampshire (MA) and the London School of Economics (PhD abd).
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