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Economy in Brief

U.S. Business Inventories Barely Increase
by Tom Moeller July 14, 2010

There has been a turn in inventory management, but it's been moderate. Business inventories ticked up 0.1% in May for the seventh increase in the last eight months. That was enough to lift inventories by a moderate 2.5% during the period after last year's 9.8% decline. Nevertheless, the increases have not kept up with the improvement in sales and the I/S ratio remained near its historic low at 1.24.

Retail inventories have started to rise and the 0.3% May gain was the sixth modest increase following sharp declines during 2008 & 2009. Nevertheless, the level of inventories remained 13.3% below the 2008 peak. Accumulation this year owes to modest gains in the auto sector (+2.4% YTD. Less autos, accumulation began only in March and it's been modest. Year-to-date inventories have risen 1.5% after last year's 4.9% decline and remain 6.5% below the 2008 peak. Recent accumulation has been notable amongst general merchandise and furniture stores while the decline in apparel store inventories abated

The business sales and inventory data are available in Haver's USECON database.

Business Inventories (%) May April March May Y/Y 2009 2008 2007
Total 0.1 0.4 0.7 -1.5 -9.8 0.8 4.0
Retail 0.3 0.2 0.9 -1.8 -10.4 -3.3 2.5
  Retail excl. Auto 0.3 0.5 1.1 -0.3 -4.9 -1.9 2.7
Wholesale 0.5 0.2 0.7 -2.1 -10.5 3.7 6.4
Manufacturing -0.4 0.6 0.5 -0.9 -8.8 -0.8 7.6
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