U.S. Wholesale Inventories Rise Slightly in February
by:Tom Moeller
|in:Economy in Brief
Summary
- Durable goods inventories resume increase; nondurables fall again.
- Sales rise steadily as durable product sales surge.
- Inventory-to-sales ratio eases but remains elevated.
Wholesale inventories edged 0.1% higher (12.0% y/y) during February following a 0.6% January decline, revised from -0.4%. The February increase compared to a 1.0% decline in the advance report issued earlier. Inventory growth has slowed considerably since early-2022.
Durable goods inventories increased 0.5% (15.4% y/y) in February following a 0.2% January slip. Motor vehicle & parts inventories rose 1.7% (25.0% y/y). Furniture & home furnishings inventories declined 1.7% (+7.9%), the third consecutive sharp monthly decline. Professional equipment inventories held steady (3.6% y/y) while electrical equipment inventories rose jumped 1.6% (21.1% y/y). Machinery inventories gained 0.9% (28.9% y/y).
In the nondurable goods sector, inventories declined 0.5% (+7.0% y/y) in February, the third consecutive monthly drop. Petroleum & petroleum product inventories fell 2.7% (+4.4% y/y), also the third straight monthly drop. Chemical inventories fell 1.0% (+4.8% y/y), the sixth straight monthly decline. Apparel inventories edged 0.1% higher (23.6% y/y) and grocery product inventories surged 1.6% (8.2% y/y).
Wholesale sales rose 0.4% (1.3% y/y) in February, the same as in January. The yearly gain is down significantly from the 23.3.4% rise in February 2022. The Action Economics Forecast Survey expected a 0.6% monthly gain.
Durable goods sales rose 1.2% (1.6% y/y) after rising 0.6% in January. Motor vehicle & parts sales improved 0.5% (16.4% y/y). Sales of machinery rose 2.2% (17.4% y/y) while electrical machinery sales increased 0.5% (1.2% y/y). Professional equipment sales strengthened 2.9% (-7.1% y/y), and furniture & home furnishings sales rose 1.1% (0.4% y/y).
Sales of nondurable goods fell 0.3% (+1.0% y/y) in February and reversed the January rise. A 4.1% drop (-8.3% y/y) in petroleum sales was accompanied by a 1.2% increase (-2.2% y/y) in chemical product sales. Apparel sales improved 2.4% (-2.6% y/y) and paper product sales rose 2.1% (1.0% y/y). Farm product sales weakened 0.5% (+11.7% y/y).
The inventory-to-sales (I/S) ratio eased to 1.37 in February from 1.38 in January, revised from 1.34. It remained up from a low of 1.19 in July of 2021. The I/S ratio in the durable goods sector fell to 1.79 but compared to a low of 1.48 in July 2021. The I/S ratio for nondurable goods held steady at 1.01 and was higher than the 0.95 low in February 2022.
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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