U.S. Wholesale Inventories Increase Modestly While Sales Decline in June
by:Tom Moeller
|in:Economy in Brief
Summary
- Wholesale inventories rise for third consecutive month.
- Sales reverse two monthly gains.
- Inventory/sales ratio increases to roughly one-year high.
Wholesale inventories increased 0.2% (0.1% y/y) during June after rising 0.5% in May, revised from 0.6%, and 0.2% in April. The June figure was unrevised from the advance report. Inventory growth has turned positive this year following the decumulation during 2023. The latest increase matched expectations in the Informa Global Markets Survey.
During June, durable goods inventories slipped 0.1% (+2.4% y/y) after increasing 0.3% in May. It was the first decline since November. Professional & commercial equipment inventories declined 2.2% (-0.5% y/y), led by a 2.7% decline (+3.1% y/y) in inventories of computer equipment. Electrical & electronic goods eased 0.3% (-5.1% y/y) for the second straight month while furniture inventories weakened 0.6% (-8.6% y/y) for a second consecutive month. Metals & minerals inventories declined 1.8% (-11.7% y/y). Inventories of lumber & other construction materials fell 0.4% (+2.9% y/y). Offsetting these declines, the value of motor vehicles & parts inventories rose 0.8% (10.8% y/y) in June and machinery inventories increased 0.6% (12.9% y/y).
Nondurable wholesale goods inventories increased 0.7% (-3.6% y/y) in June following a 0.9% May gain. Chemical inventories increased 1.1% (-7.6% y/y). Inventories of petroleum & products increased 3.8% (1.6% y/y) while paper & paper product inventories rose 0.9% (-7.8% y/y). Farm product inventories fell 0.3% (-20.9% y/y) while grocery product inventories rose 0.8% (-3.2% y/y). Apparel inventories held steady (-18.2% y/y).
Wholesale sales of merchandise declined 0.6% (+2.4 y/y) in June after rising 0.3% in May. A 0.4% rise had been expected in the Action Economics Forecast Survey.
Durable goods sales rose 0.4% in June (2.9% y/y) after a 0.7% May rise. Professional equipment sales increased 0.9% (2.6% y/y) with a 1.8% rise (-0.2% y/y) in computer equipment purchases. Hardware sales increased 2.7% (10.5% y/y). Motor vehicle sales edged 0.1% higher (4.0% y/y) and furniture sales rose 2.8% (-4.1% y/y). Moving lower, sales of machinery declined 0.4% (-2.0% y/y) and metals & minerals sales declined 2.1% (-11.1% y/y). Electrical equipment sales held steady (+10.4% y/y).
Nondurable goods wholesale sales weakened 1.6% in June (+1.9% y/y) after easing 0.1% in May. Petroleum sales declined 6.6% (+3.9% y/y) and apparel purchases eased 0.9% (+2.7% y/y). Paper & product sales declined 1.9% (-4.8% y/y) while chemical sales weakened 0.6% (-1.7% y/y). Grocery product sales edged up 0.1% (3.0% y/y) but farm product sales were off 2.8% (-16.5% y/y.
The wholesale inventory/sales ratio (I/S) rose to 1.37 in June, the highest level since July of last year. For durable goods, the I/S ratio of 1.81 in June compared to 1.82 in May. The nondurable goods I/S ratio increased to 0.95 last month from 0.93 in May.
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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