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Economy in Brief

U.S. Wholesale Inventories Continue To Decline
by Tom Moeller  August 9, 2013

Inventories at the wholesale level fell 0.2% (+2.9% y/y) during June following a revised 0.6% drop in May, initially reported as -0.5%. A 0.3% decline (+0.7 y/ in inventories of nondurable goods led June's shortfall. Farm product inventories were off 2.0% (-16.9%y/y). Apparel inventories also fell 1.3% (+0.5% y/y) and paper inventories slipped 0.4% (-2.3% y/y). Working the other way, petroleum inventories increased 1.9% (6.6% y/y). In the durable goods sector, inventories were unchanged (+4.3% y/y). Motor vehicle inventories fell 1.5% (-2.6% y/y) and hardware inventories declined 1.1% (+5.0% y/y). These declines were offset by a 2.1% rise (13.3% y/y) in computer equipment and a 0.6% increase (8.8% y/y) in machinery.

Wholesale sector sales increased 0.4% (5.6% y/y) after a 1.5% May increase, last month reported as 1.6%. Higher prices helped petroleum sales to increase 5.3% (7.7% y/y). This gain offset declines in most other nondurable goods sectors. Chemical sales fell 1.3% (+0.8% y/y) and paper sales dropped 1.1% (+3.2% y/y). Sales of durables rose 1.1% (5.4% y/y) reflecting a 3.7% jump (9.6% y/y) in electrical equipment and a 1.5% increase in computers (2.7% y/y). Metals sales inched up 0.2% (-5.9% y/y).

The wholesale sector's inventory-to-sales ratio slipped to 1.17, the lowest level since September 2011. The durable goods ratio fell to 1.56 but the I/S ratio in the nondurables sector held at 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 (%) Jun May Apr Y/Y 2012 2011 2010
Inventories -0.2 -0.6 -0.1 2.9 5.5 9.2 10.5
Sales 0.4 1.5 0.7 5.6 4.3 12.8 12.1
I/S Ratio 1.17 1.18 1.21 1.20(Jun 2012) 1.19 1.17 1.17
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