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Economy in Brief

U.S. Business Inventories Tick Higher M/M But Trend Slows
by Tom Moeller  July 15, 2013

Total business inventories nudged up 0.1% during May (3.8% y/y) following a downwardly revised 0.2% April gain. The figure was accompanied by a 1.1% jump (3.1% y/y) in business sales. As a result, the inventory-to-sales ratio ticked down to 1.29, about where it's been for the last year.

In the retail sector, inventories jumped 0.6% (6.2% y/y) as motor vehicle inventories gained 1.2%  (12.7% y/y). Inventories excluding autos rose 0.3% (3.5% y/y). This increase was led by a 1.4% rise (-0.6% y/y) in furniture, electronic and appliances inventories while food & beverage stores raised inventories by 1.0% (2.8% y/y). General merchandise inventories were unchanged (3.8% y/y) and building material stores inventories slipped 0.1% (+3.0% y/y. Apparel store inventories also slipped 0.1% (+4.6% y/y). The retail inventory-to-sales ratio of 1.41 remained nearly its highest since September 2010.

Merchant wholesale inventories fell 0.5% (+3.3% y/y). The y/y gain remained down sharply versus the prior two years. Restraint continues in both durable and nondurable good industries. The inventory-to-sales ratio turned sharply lower. Factory sector inventories were unchanged (2.2% y/y). The inventory-to-sales ratio slipped m/m to 1.30.

Business sales jumped 1.1% (3.1% y/y) led by a 1.6% rise (4.1% y/y) in wholesale sales. Factory shipments also gained 1.0% (1.3% y/y). As reported earlier, retail sales rose 0.7% (4.4% y/y). Sales excluding autos increased 0.5% (3.5% y/y).

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

Business Inventories(%) May Apr Mar May Y/Y 2012 2011 2010
Total 0.1 0.2 -0.1 3.8 5.1 7.9 8.8
 Retail 0.6 0.5 -0.6 6.2 8.0 3.9 6.2
  Retail excl. Motor Vehicles 0.3 0.3 -0.7 3.5 3.5 3.6 3.9
 Merchant Wholesalers -0.5 -0.1 0.3 3.3 5.5 9.2 10.5
 Manufacturing 0.0 0.1 0.0 2.2 2.4 10.2 9.8
Business Sales (%)
Total 1.1 0.0 -1.2 3.1 4.4 11.0 9.7
 Retail 0.7 0.1 -0.4 4.4 5.1 7.7 5.8
  Retail excl. Motor Vehicles 0.5 -0.2 -0.4 3.5 4.4 7.1 4.6
 Merchant Wholesalers 1.6 0.7 -1.4 4.1 4.3 12.8 12.1
 Manufacturing 1.0 -0.7 -1.5 1.3 4.0 12.1 11.0
I/S Ratio
Total 1.29 1.30 1.30 1.28 1.29 1.27 1.28
 Retail 1.41 1.41 1.40 1.38 1.38 1.36 1.40
  Retail Excl. Motor Vehicles 1.22 1.22 1.22 1.22 1.22 1.23 1.26
 Merchant Wholesalers 1.18 1.21 1.22 1.19 1.19 1.17 1.17
 Manufacturing 1.30 1.31 1.30 1.29 1.29 1.29 1.28
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