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Economy in Brief

U.S. Wholesale Inventories Stabilize in July; Mixed by Industry
by Carol Stone  September 11, 2013

Inventories at the wholesale level recovered by 0.1% (+2.2% y/y) during July following a 0.2% fall (unrevised) drop in June and two prior declines. The upturn came in durable goods inventories, which rose 0.6% in July (+4.5% y/y) after a modest 0.1% increase in June. Most industry sectors participated in the advance, with machinery and equipment, miscellaneous durables and furniture all up at least 1.%. Declines did come in computers, -3.5%, and hardware and plumbing supplies, -0.2%. Nondurable goods inventories continued to fall, down 0.8% m/m and 1.3% y/y. This was again concentrated in farm products, which fell 10.1% in the month and were off 30.1% year-on-year. Drugs and druggist sundries, beer, wine and alcoholic beverages and miscellaneous nondurables also saw inventory reductions. By contrast, paper goods, apparel, chemicals and petroleum stocks all rose more than 1%.

Wholesale sales edged up just 0.1% (5.7% y/y) after June's 0.4% increase (unrevised). Durable goods sales fell 0.6% (+4.8% y/y), led down by motor vehicle and parts wholesale shipments, -3.1% m/m, and also including electronics (not computers), hardware and machinery. Sales were up at wholesalers of furniture, lumber, computers and metals. Sales by wholesalers of nondurable goods gained 0.7% (+6.4% y/y), widespread by industry and especially at petroleum dealers, up 1.9%, and beer, wine and alcoholic beverage distributors, up 2.1%. Only druggist supplies and miscellaneous nondurables saw decreases.

The wholesale sector's inventory-to-sales ratio remained at 1.17, the lowest level since September 2011. The durable goods ratio rose to 1.58 and that in nondurable goods eased further 0.83.

The wholesale trade figures are available in Haver's USECON database.

Wholesale Sector - NAICS Classification (%) Jul Jun May Y/Y 2012 2011 2010
Inventories 0.1 -0.2 -0.6 2.2 5.5 9.2 10.5
Sales 0.1 0.4 1.5 5.7 4.3 12.8 12.1
I/S Ratio 1.17 1.17 1.18 1.21(Jul 2012) 1.19 1.17 1.17
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