U.S. Wholesale Inventories Decline Further in August
by:Tom Moeller
|in:Economy in Brief
Summary
- Inventories of nondurable goods decline, while durables hold steady.
- Sales surge is led by petroleum as well as chemicals.
- Inventory-to-sales ratio weakens sharply.
Wholesale inventories eased 0.1% (-1.0% y/y) in August following a 0.3% July decline. The decline matched expectations in the Informa Global Markets Survey. It was the seventh decline in the past eight months and inventories where at their lowest level since July 2022.
A 0.4% fall (-7.8% y/y) in nondurable goods inventories led the overall decline as it followed little change in July. Declines were widespread amongst categories. Inventories of apparel fell 2.6% (-15.6% y/y) while chemical inventories declined 2.4% (-14.2% y/y). Drug inventories weakened 0.6% (+2.4% y/y) and paper & paper product inventories fell 0.3% (-15.6% y/y). Working higher, petroleum inventories rose 1.9% (-10.2% y/y) and farm product inventories rose along with inventories of groceries.
Durable goods inventories held steady in August (+3.5% y/y) following two months of moderate decline. Automotive inventories increased 2.1% (13.8% y/y) while machinery inventories rose 0.6% (20.0% y/y). Hardware & plumbing product inventories gained 0.7% (-1.1% y/y). These increases were offset by a 1.8% decline (-2.5% y/y) in electrical equipment and a 1.7% drop (-5.0% y/y) in metals and minerals inventories. Furniture inventories fell 1.4% (-13.6% y/y).
Wholesale sales jumped 1.8% (-1.7% y/y) in August after rising 1.2% in July. The Action Economics Forecast Survey expected a 0.6% increase. Nondurable goods dales surged 3.3% (-1.3% y/y) as petroleum sales jumped 8.3% (-6.4% y/y). Apparel sales improved 0.3% (-13.3% while chemical sales rose 1.4% (-6.2% y/y). Paper products sales fell 1.4% (-11.0% y/y).
Durable goods sales rose 0.2% (-2.0% y/y) as motor vehicle sales increased 1.5% (7.2% y/y). Professional equipment sales rose 1.8% (1.4% y/y) while furniture sales increased 1.3% both m/m and y/y). These increases were offset by a 1.8% decline (4.9% y/y) in electrical product sales. Machinery sales held steady (3.6% y/y).
The wholesale inventory-to-sales (I/S) ratio fell to 1.36 in August from 1.39 in July. The I/S ratio for durable goods held steady at 1.84 while the ratio for nondurable goods declined to 0.95.
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.
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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