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Economy in Brief

U.S. Wholesale Inventories Decline As Sales Rebound
by Tom Moeller  July 10, 2013

Inventories at the wholesale level fell 0.5% (+3.3% y/y) during May following a 0.1% slip in April. A 6.0% decline (-6.3% y/y) in farm product inventories led the decline. Inventories of metals fell 1.7% (-3.1% y/y) following sharp declines during the prior two months. Machinery, equipment & supplies inventories were off 0.7% but up 9.1% y/y). Offsetting these declines was a 3.0% increase (5.5% y/y) in inventories at drug stores and a 1.9% gain (3.6% y/y) in chemical inventories. Petroleum inventories rose 0.7% (-5.2% y/y) while inventories of electrical goods increased 0.6% (5.5% y/y). Motor vehicle and parts inventories were unchanged (-0.3% y/y).  

Wholesale sector sales increased 1.6% (4.1% y/y) led higher by a 5.3% (-0.5% y/y) surge in apparel sales. Grocery & related products sales gained 3.8% (8.6% y/y) with higher prices. Also quite firm was the 3.5% gain (10.9% y/y) in purchases of farm products. Motor vehicle sales grew 3.0% (7.0% y/y) while higher prices led petroleum sales up 1.1% (-4.3% y/y). To the downside, metals purchases dropped 4.5% (-6.8% y/y) and sales of lumber fell 0.6% (+15.0% y/y). Electronic goods inventories were off 0.3% (+3.6% y/y).

The wholesale sector's inventory-to-sales ratio fell to 1.18, the lowest level since April of last year. The durable goods ratio fell to 1.57 but the I/S ratio in the nondurables sector plunged to 0.84, a low for the economic recovery.

The wholesale trade figures are available in Haver's USECON database. The expectation figure is in AS1REPNA.

Wholesale Sector - NAICS Classification (%) May Apr Mar Y/Y 2012 2011 2010
Inventories -0.5 -0.1 0.3 3.3 5.5 9.2 10.5
Sales 1.6 0.7 -1.4 4.1 4.3 12.8 12.1
I/S Ratio 1.18 1.21 1.22 1.19(May 2012) 1.19 1.17 1.17
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