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Economy in Brief
German PPI Accelerates
The German year-on-year PPI has generally been decelerating since early 2017...
U.S. Leading Economic Indicators Signal Continued Expansion
The Conference Board's Composite Index of Leading Economic Indicators increased 0.3% during March...
Philadelphia Fed Factory Conditions Improve; Prices Jump
The Philadelphia Fed reported that its General Factory Sector Business Conditions Index rose to 23.2 during April...
U.S. Initial Claims for Unemployment Insurance Are Little Changed
Initial unemployment insurance claims slipped to 232,000 (-6.1% y/y) during the week ended April 14...
U.K. Retail Sales Fall
U.K. GDP is expected to cool its jets when the first quarter GDP number is released...
by Tom Moeller February 12, 2010
A developing
trend towards accumulation of business inventories was cut short in
December. The 0.2% yearend decline partially reversed gains during the
prior two months which were the first in over a year. For the year
business inventories fell a record 9.7% as prices and volumes declined.
Perhaps the earlier accumulation resulted from slower sales growth.
Business sales in December were below the pace during three of the
prior four months. As a result, the inventory/sales ratio fell back to
the cycle low of 1.26 from a January '09 high of 1.46.
Lower
manufacturing and wholesale inventories led the December decline after
earlier gains which, in the case of wholesalers, was led by higher
petroleum prices. Total retail inventories were unchanged
after steady declines since August 2008. Cuts last month were led by
food & beverage stores with a 1.5% (-0.6% y/y) decline.
Elsewhere, inventory cutting slowed from earlier strong declines.
Furniture inventories even have risen during three of the last four
months while clothing and general merchandise inventories are falling
at slower rates. Auto dealer inventories slipped m/m and are down by
one-quarter y/y.
Retailers' inventory/sales ratio fell to a new cycle low with sales gains and little inventory growth. The I/S ratio for department stores led the decline with little increase elsewhere. Wholesalers' ratio also fell to a near-record low while the I/S ratio in the factory sector fell to the lowest level since July 2008.
The business sales and inventory data are available in Haver's USECON database.
Business Inventories (%) | December | November | October | Y/Y | 2009 | 2008 | 2007 |
---|---|---|---|---|---|---|---|
Total | -0.2 | 0.5 | 0.3 | -9.7 | -9.7 | 0.4 | 4.0 |
Retail | 0.0 | -0.2 | -0.0 | -10.6 | -10.6 | -3.3 | 2.5 |
Retail excl. Auto | 0.2 | -0.3 | -0.2 | -5.1 | -5.1 | -1.9 | 2.7 |
Wholesale | -0.8 | 1.6 | 0.6 | -10.2 | -10.2 | 2.5 | 6.2 |
Manufacturing | -0.1 | 0.2 | 0.4 | -8.6 | -8.6 | 2.2 | 3.7 |