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Economy in Brief

U.S. Business Inventory Growth Picks Up
by Tom Moeller  December 14, 2011

The U.S. Commerce Department reported yesterday that business inventories rose 0.8% during October following no change in September. A 0.5% increase had been expected. Business sales increased a stable 0.7%. As a result, the inventory/sales ratio held at 1.27. By October, inventories were 8.7% higher than one year earlier, and sales were up 10.9%.

In the retail sector, inventories dipped m/m for the second consecutive month. Motor vehicle & parts inventories increased a modest 0.2% (2.0% y/y) while excluding autos inventories dipped 0.1% (+4.0% y/y). Inventories of building materials fell 0.2% (+3.1% y/y) and food & beverage store inventories also fell 0.2% (+5.6% y/y). Offsetting these declines were a 0.5% (8.9% y/y) increase in apparel, a 0.1% (-1.8% y/y) rise in furniture & equipment and no change (3.7% y/y) at general merchandise stores.

The manufacturing and trade data are in Haver's USECON database. Note that in a value-added feature, the database includes series calculated by Haver database managers showing sales, inventories and I/S ratios for total business less motor vehicle dealers and related wholesale operations. The latest gain in inventories compared to an expected 0.4% increase according to Bloomberg.

The press release for yesterday's FOMC meeting can be found here.

Business Inventories (%) Oct Sep Aug Oct Y/Y 2010 2009 2008
Total 0.8 0.0 0.4 8.7 8.6 -9.3 -1.2
 Retail -0.0 -0.1 0.7 3.4 6.1 -10.0 -4.4
   Retail excl. Motor Vehicles -0.1 0.2 0.6 4.0 3.7 -4.7 -3.0
 Merchant Wholesalers 1.6 0.0 0.1 10.9 11.0 -11.8 3.7
 Manufacturing 0.9 0.1 0.3 11.5 8.7 -6.8 -4.1
Business Sales (%)
Total 0.7 0.6 0.4 10.9 9.3 -14.6 2.3
 Retail 0.3 0.6 1.3 6.8 6.8 -7.8 -1.6
    Retail excl. Motor Vehicles 0.2 0.6 0.5 6.7 6.1 -6.3 2.1
 Merchant Wholesalers 0.9 0.3 1.0 13.1 12.6 -16.1 5.9
 Manufacturing 0.6 0.3 0.1 11.6 8.6 -18.5 2.3
I/S Ratio
Total 1.27 1.27 1.27 1.29 1.28 1.39 1.32
 Retail 1.32 1.32 1.34 1.37 1.37 1.46 1.51
    Retail Excl. Motor Vehicles 1.18 1.18 1.19 1.21 1.23 1.30 1.29
 Merchant Wholesalers 1.16 1.15 1.15 1.18 1.16 1.30 1.21
 Manufacturing 1.33 1.33 1.33 1.33 1.33 1.41 1.27
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