U.S. Wholesale Inventories Rise Modestly in October but Sales Ease
by:Tom Moeller
|in:Economy in Brief
Summary
- Inventories trend higher y/y.
- Sales edge lower m/m, but trend is up.
- Inventory-to-sales ratio moves lower.
Wholesale trade inventories increased 0.2% (0.9% y/y) during October after an unrevised 0.2% September decline and a 0.2% August rise. The increase compared to a 0.2% rise expected in the Informa Global Markets Survey and compared to no change in the advance report issued two weeks ago.
Durable goods inventories rose 0.1% in October (2.0% y/y) after falling 0.6% in September. Machinery inventories, the largest sector, fell 0.2% (+7.9% y/y) while motor vehicles & parts, the second largest grouping, edged 0.1% lower (+6.0% y/y). Furniture inventories rose 2.7% (2.4% y/y) while electrical equipment inventories declined 1.0% (-3.3% y/y). Inventories of nondurable goods rose 0.3% (-0.8% y/y) following a 0.4% rise. Petroleum inventories fell 2.5% (-15.7% y/y). Drug inventories, which make up one-quarter of nondurable inventories, advanced 1.1% (7.9% y/y). Grocery inventories, the second largest category, rose 1.6% (2.5% y/y). Apparel inventories rose 0.3% (-11.3% y/y) and chemical inventories eased 0.2% (-3.8% y/y).
Sales at the wholesale level slipped 0.1% (+0.9% y/y) in October after rising 0.5% in September and falling 0.2% in August. A 0.2% October rise had been expected in the Action Economics Forecast Survey.
Durable goods sales held steady in October (4.5% y/y) after rising 0.6% in September. Sales of electrical equipment & electronic goods, the largest sector, rose 1.9% (13.7% y/y), after a 0.4% gain. Professional and commercial equipment sales, which includes computers, declined 2.8% (+5.1% y/y), while vehicle sales improved 0.4% (5.9% y/y). Sales of machinery edged 0.1% higher (2.3% y/y). Nondurable product sales weakened 0.3% (-2.2% y/y) after rising 0.4% in September. Petroleum product sales tumbled fell 0.6% (-14.8% y/y). Drug store sales, the largest category, weakened 1.1% (+5.4% y/y), while grocery store sales gained 0.9% (4.7% y/y). Sales of apparel weakened 2.6% (+4.0% y/y). Paper sales fell 0.5% (-1.2% y/y).
The inventory-to-sales (I/S) ratio at the wholesale level held steady at 1.34 in October but has been moving lower for the last year.
The wholesale I/S ratio for durable goods edged up to 1.76 but also has been trending lower. The machinery ratio declined to 3.01 while motor vehicles eased to 1.81. The I/S ratio for nondurable goods held at 0.95 but remained down from 1.04 early last year. The petroleum industry I/S ratio eased to 0.31, and the drug industry ratio moved up to 1.00. Apparel's I/S ratio of 2.10 remained below its 2.46 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.
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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