U.S. Wholesale Inventories Edge Higher in December
by:Tom Moeller
|in:Economy in Brief
Summary
- Inventory growth continues to weaken y/y.
- Sales trend sideways.
- Inventory-to-sales ratio remains elevated.
Wholesale inventories rose 0.1% (17.6% y/y) during December following a 0.9% November increase, revised from 1.0%. The gain matched the increase in the advance report issued earlier. Inventory growth has slowed considerably since early last year.
Durable goods inventories rose 0.9% (20.0% y/y) in December following a 1.0% November gain. Motor vehicle & parts inventories jumped 2.6% (24.6% y/y). Furniture & home furnishings inventories declined 1.1% (+20.9% y/y) while professional equipment inventories fell 0.8% (+10.4% y/y). Electrical equipment inventories rose 1.4% (25.6% y/y) while machinery inventories gained 2.2% (28.8% y/y).
In the nondurable goods sector, inventories declined 1.2% (+14.1% y/y) in December after rising 0.8% in November. Petroleum & petroleum product inventories fell 5.8% (+9.7% y/y). Chemical inventories eased 0.2% (+15.3% y/y), the fourth straight monthly decline. Apparel inventories declined 2.3% (+46.5% y/y) and grocery product inventories eased 0.3% (+13.3% y/y).
Wholesale sales edged slightly lower (+7.3% y/y) in December after declining 1.4% in November. The Action Economics Forecast Survey expected no change. Durable goods sales rose 1.0% (5.3% y/y) after a 2.9% decline. Motor vehicle & parts sales rose 0.4% (15.9% y/y). Sales of machinery rose 0.1% (18.1% y/y) while electrical machinery sales increased 2.6% (4.3% y/y). Professional equipment sales strengthened 3.3% (1.9% y/y), and furniture & home furnishings sales edged 0.1% higher (13.9% y/y).
Sales of nondurable goods declined 0.9% (+9.0% y/y) in December after a slight November decline. A 2.2% decline (+11.1% y/y) in petroleum sales was accompanied by a 3.6% drop (-8.7% y/y) in apparel sales. Chemical sales weakened 1.3% (+9.1% y/y) but farm product sales rose 2.7% (23.6% y/y).
The inventory-to-sales (I/S) ratio held steady in December at 1.36 but remained up from a low of 1.19 in July of 2021. It was the highest ratio since June 2020. The higher I/S ratio of 1.80 in the durable goods sector compared to a low of 1.48 in July 2021. The I/S ratio for nondurable goods was unchanged at 0.97 and remained at the highest level since May 2021.
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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