U.S. Wholesale Inventories Rise Modestly in February as Sales Strengthen
by:Tom Moeller
|in:Economy in Brief
Summary
- Inventories trend higher y/y.
- Sales surge broadly.
- Inventory-to-sales ratio continues to decline.
Wholesale trade inventories increased 0.3% (1.1% y/y) during February after a 0.8% January rise and a 0.7% December decline. The increase matched expectations in the Informa Global Markets Survey and compared to a 0.3% decline in the advance report issued two weeks ago.
Durable goods inventories rose 0.2% in February (0.4% y/y) after rising 0.8% in January. Machinery inventories, the largest sector, fell 0.5% (+1.4% y/y) while inventories of motor vehicles & parts, the second largest grouping, rose 0.3% (-1.3% y/y). Furniture inventories eased slightly (+4.1% y/y) while electrical equipment inventories declined 0.4% (-2.9% y/y). Inventories of nondurable goods rose 0.5% (2.3% y/y) following a 0.8% rise. Petroleum inventories increased 2.4% (3.5% y/y). Drug inventories, which make up one-quarter of nondurable inventories, advanced 0.3% (1.3% y/y). Grocery inventories, the second largest category, rose 1.0% (6.6% y/y). Apparel inventories fell 0.3% (-7.0% y/y) and chemical inventories rose 0.7% (0.6% y/y).
Sales at the wholesale level strengthened 2.4% (4.3% y/y) in February after declining 0.9% in January and rising 1.4% in December. A 0.8% February rise had been expected in the Action Economics Forecast Survey.
Durable goods sales rose 3.4% (6.6% y/y) in February after falling 2.4% in January. Sales of electrical equipment & electronic goods, the largest sector, surged 3.6% (19.1% y/y), after a 4.9% decline. Professional and commercial equipment sales, which includes computers, rose 4.9% (9.5% y/y), while vehicle sales improved 2.1% (-0.9% y/y). Sales of machinery surged 5.1% (3.1% y/y). Nondurable product sales strengthened 1.4% (2.2% y/y) after rising 0.4% in January. Petroleum product sales rose 2.8% (-2.1% y/y). Drug store sales, the largest category, increased 1.4% (10.0% y/y), while grocery store sales gained 0.9% (5.3% y/y). Sales of apparel weakened 1.2% (+5.0% y/y) while paper sales rose 3.4% (2.6% y/y).
The inventory-to-sales (I/S) ratio at the wholesale level declined to 1.30 in February and has been moving lower for the last two years.
The wholesale I/S ratio for durable goods fell to 1.69 and also has been trending lower. The machinery ratio fell to 2.94 while motor vehicles eased to 1.73. The I/S ratio for nondurable goods slipped to 0.93 and remained down from 1.04 early in 2023. The petroleum industry I/S ratio held steady at 0.31, and the drug industry ratio eased to 0.95. Apparel's I/S ratio of 2.06 remained below its 2.32 level one year earlier and has been declining since early 2023.
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.
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.
More Economy in Brief
