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Economy in Brief

U.S. Business Inventory Growth Is Steady
by Tom Moeller  October 15, 2012

During August, business inventories rose 0.6% following a 0.8% July rise. Though the y/y trend gain fell, these latest gains were elevated versus the Q2 average of 0.2%. Behind the quicker increase was a 0.9% rise in merchant wholesalers inventories driven by a 9.4% surge (-2.7% y/y) in petroleum inventories. Less petroleum, wholesale inventories ticked up 0.1% (5.8% y/y) in August. Factory inventories rose a steady 0.6% (3.5% y/y). Inventories at the retail level also rose 0.6% (7.8% y/y). That was led by a 1.5% jump in autos (20.3% y/y) after a 2.7% July increase. Nonauto retail inventory accumulation was negligible.

Business sales increased 0.5% after a 0.9% July rise. Therefore, the inventory-to-sales ratio remained a constant 1.28. Retail sales surged 1.3% (4.9% y/y) as auto sales jumped. Excluding autos, sales increased 1.1% (4.6% y/y). As a result, the nonauto retail I/S ratio remained roughly stable at 1.20. Sales of merchant wholesalers increased 0.9% (2.1% y/y) with the rise in oil prices. That was enough to leave the I/S ratio roughly constant at 1.20. Factory shipments fell 0.3% pushing the I/S ratio up slightly to 1.28.

The manufacturing and trade data are in Haver's USECON database.

 

Business Inventories(%) Aug Jul Jun Aug Y/Y 2011 2010 2009
Total 0.6 0.8 0.1 5.3 7.7 8.3 -9.4
 Retail 0.6 1.1 0.8 7.8 3.6 6.1 -10.1
  Retail excl. Motor Vehicles 0.2 0.4 0.1 3.0 3.7 3.9 -4.8
 Merchant Wholesalers 0.5 0.6 -0.2 5.2 9.9 10.1 -11.8
 Manufacturing 0.6 0.6 -0.1 3.5 9.4 8.8 -6.8
Business Sales (%)
Total 0.5 0.9 -1.2 3.1 11.3 9.7 -14.8
 Retail 1.3 0.8 -0.8 4.9 8.3 5.8 -7.9
  Retail excl. Motor Vehicles 1.1 0.9 -0.9 4.6 7.6 4.7 -6.4
 Merchant Wholesalers 0.9 -0.2 -1.4 2.1 13.5 11.6 -16.2
 Manufacturing -0.3 1.9 -1.2 2.6 11.8 11.2 -18.8
I/S Ratio
Total 1.28 1.28 1.29 1.26 1.26 1.27 1.39
 Retail 1.38 1.39 1.38 1.34 1.34 1.38 1.46
  Retail Excl. Motor Vehicles 1.20 1.21 1.22 1.20 1.21 1.24 1.30
 Merchant Wholesalers 1.20 1.21 1.20 1.17 1.16 1.18 1.31
 Manufacturing 1.28 1.27 1.29 1.27 1.27 1.28 1.39
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