U.S. Wholesale Inventories Edge Higher in August While Sales Slip
by:Tom Moeller
|in:Economy in Brief
Summary
- Inventories continue on trend of moderate accumulation.
- Sales increase paced by durable goods.
- Inventory-to-sales ratio continues sideways movement.
Wholesale trade inventories increased 0.1% (0.6% y/y) during August after an unrevised 0.2% July increase and an unchanged level in June. The increase compared to a 0.2% rise expected in the Informa Global Markets Survey and compared to a 0.1% gain in the advance report issued two weeks ago.
Durable goods inventories rose 0.3% in August (2.8% y/y) after edging 0.1% higher in July. Machinery inventories, the largest sector, rose 0.5% (11.3% y/y) while motor vehicles & parts, the second largest grouping, edged 0.1% higher (9.6% y/y). Furniture inventories rose 0.3% (-4.0% y/y) while electrical equipment inventories declined 0.3% (-3.1% y/y). Inventories of nondurable goods slipped 0.1% (-3.0% y/y) following a 0.5% rise. Petroleum inventories led the decline and fell 1.7% (-12.8% y/y). Drug inventories, which make up a quarter of nondurable inventories, eased 0.2% (+9.4% y/y). Grocery inventories, the second largest category, rose 0.3% (-2.3% y/y). Apparel inventories rose 0.7% (-12.8% y/y) and chemical inventories rose 0.3% (-6.4% y/y).
Sales at the wholesale level slipped 0.1% (+1.1% y/y) in August after an unrevised 1.1% July increase and an unrevised 0.3% June weakening. A 0.4% August rise had been expected in the Action Economics Forecast Survey.
Durable goods sales increased 0.9% in August (4.3% y/y), the same as in July. Sales of electrical equipment & electronic goods, the largest sector, rose 2.3% (15.6% y/y), after a 1.2% gain. Professional and commercial equipment sales, which includes computers, rose 0.6% (4.4% y/y), while vehicle sales rose 1.3% (5.0% y/y). Sales of machinery rose 1.4% (0.5% y/y). Nondurable product sales weakened 0.9% (-1.7% y/y) after rising 1.4% in July. Petroleum product sales tumbled 3.1% (-10.0% y/y). Drug store sales, the largest category, eased 0.2% (+6.6% y/y), while grocery store sales gained 0.2% (1.9% y/y). Sales of apparel improved 0.4% (5.4% y/y). Paper sales edged 0.1% higher (0.2% y/y).
The inventory-to-sales (I/S) ratio at the wholesale level held steady at 1.35 in August and has been moving sideways for the last year.
The wholesale I/S ratio for durable goods fell to 1.78. The machinery ratio declined to 3.05 while motor vehicles eased to 1.87. The I/S ratio for nondurable goods rose to 0.95 but remained down from 1.04 early last year. The petroleum industry I/S ratio held steady at 0.32, and the drug industry ratio held at 1.02. Apparel's I/S ratio of 2.15 remained below its 2.60 level one year earlier.
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 from the AS1REPNA database.
The minutes to the latest FOMC meeting can be found here.
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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