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Economy in Brief
Delay in Release
of Data for Construction, MSIO, Intl Trade, Wholesale Trade, Treasury Statement, Retail Sales, Business Sales & Inventories, and Housing Starts Due to Lapse in Federal Government Funding.
U.S. Energy Prices Generally Move Higher
Retail gasoline prices were unchanged at $2.25 per gallon last week (-12.3% y/y)...
Japan Logs Another Trade Deficit
Japan logged a deficit on its trade account of 184 billion yen in Decmber...
U.S. Existing Home Sales Drop to Three-Year Low
The National Association of Realtors reported that sales of existing homes fell a greater-than-expected 6.4% in December...
Philadelphia Fed Nonmanufacturing Business Activity Slumps Again in January
The Philadelphia Fed reported that its Nonmanufacturing Business Index of current conditions at the company level slumped further to -0.2 in January...
by Tom Moeller January 12, 2007
Total business inventories rose 0.4% in November following a downwardly revised 0.2% October gain. Consensus expectations had been for a 0.3% rise and over the last three months the 0.3% average increase was the slowest since September of last year.
During the last ten years there has been a 57% correlation between the y/y change in business inventories and the change in factory sector industrial production. Using quarterly figures, there has been an 84% correlation between the change in real private nonfarm inventories and production.
Business sales rose 0.5% (4.0% y/y), the first increase in three months. Wholesale sales led the gain with a 1.0% (7.95 y/y) pop and retail sales rose 0.6% (4.3% y/y). Factory shipments ticked up 0.1% (0.7% y/y). As a result the inventory to sales ratio was stable at 1.30 for the third month.
Retail inventories fell for the third straight month but excluding autos they rose 0.3%. General merchandise inventories rose 0.2% (2.9% y/y) and have been accumulating strongly since May. Clothing store inventories surged 1.6% (9.7% y/y), the third month of strong gain. Furniture inventories fell for the second month with a 0.2% decline (+4.3% y/y).
| Business Inventories | November | October | Y/Y | 2005 | 2004 | 2003 |
|---|---|---|---|---|---|---|
| Total | 0.4% | 0.2% | 6.9% | 4.4% | 7.6% | -1.0% |
| Retail | -0.3% | -0.2% | 4.0% | 2.7% | 6.7% | 3.8% |
| Retail excl. Autos | 0.3% | 0.2% | 4.6% | 4.5% | 7.1% | 1.9% |
| Wholesale | 1.3% | 0.4% | 10.1% | 7.1% | 9.8% | 1.8% |
| Manufacturing | 0.2% | 0.3% | 7.1% | 4.0% | 6.9% | -7.4% |
