·
Total business inventories rose 0.2% in
October following a downwardly revised, slight decline in September.
· Wholesale inventories jumped 1.1%. During the last ten years there has been a 63% correlation between the y/y change in wholesale inventories and the change in imports of merchandise.
· Retail inventories fell another 0.6% as motor vehicle inventories fell sharply for the second consecutive month, down 2.3% (+7.9% y/y). Non-auto retail inventories advanced 0.3% but meaningful gains were limited to building materials (+15.7% y/y) and food (2.7% y/y). Elsewhere, inventories of furniture & home furnishings (+2.5% y/y) fell for the second consecutive month. Apparel inventories rose 0.1% (1.3% y/y) and general merchandise inventories fell 0.1% (+3.2% y/y).
· Overall business sales surged 1.2% (+11.0% y/y) driven by the 1.2% spike in factory shipments (10.6% y/y).
· The ratio of inventories-to-sales fell back to the historic low of 1.30.