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Economy in Brief

U.S. Business Inventories Increase in September
by Carol Stone  November 20, 2013

Total business inventories increased 0.6% in September (3.1% y/y) following a 0.4% August rise, revised from 0.3% reported before. These stocks accompanied a modest 0.2% rise in business sales (2.9% y/y) which came after August's 0.3% increase. As a result, the inventory-to-sales ratio was again at 1.29, where it's been since April.  If this ratio were carried to the third digit, though, it would be 1.292 in September, up from 1.287 in August, not quite as insignificant a result as seen at first glance.

In the retail sector, inventories advanced 0.8% (5.7% y/y) in September, including a sizable 1.9% rise in motor vehicles (9.7% y/y). This was tied to a drop of 1.2% in motor vehicle sales then, which, as noted in the Retail Sales report, was quickly recovered in October.  Inventories excluding autos rose 0.4% in September (4.0% y/y). Inventories of furniture, electronics and appliances rose 0.3% (-1.4% y/y) while building materials rose 0.8% (+3.3% y/y).  Food & beverage store inventories were unchanged (+2.1% y/y), and apparel store inventories rose 0.4% (+2.9% y/y). General merchandise stores' inventories rose 0.9% (a sizable 6.2% y/y). The retail inventory-to-sales ratio rose to 1.42 in September from 1.40 in August.

Merchant wholesale inventories increased 0.4% (2.2% y/y). Durable goods distributors' stocks rose 0.3% after 0.8% in August, and those at nondurable goods distributors rose 0.5% after a 0.7% rise in August. Wholesalers' inventory-to-sales ratio in September was 1.18, the same as August's upwardly revised ratio. Factory sector inventories rose 0.4% (1.7% y/y), and the resulting inventory-to-sales ratio moved to 1.30 from 1.29 in August.

As noted above, total September business sales rose 0.2% (4.2% y/y).  As in August, this was again led by a 0.6% rise (3.9% y/y) in wholesale sales. Retail sales were flat in September (3.4% y/y) while sales less autos were up 0.3% (2.6% y/y). Shipments from the factory sector edged up 0.1% (1.5% y/y).

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

Business Inventories (%) Sep Aug Jul Sep Y/Y 2012 2011 2010
Total 0.6 0.4 0.4 3.1 5.1 7.9 8.8
 Retail 0.8 0.4 0.8 5.7 8.0 3.9 6.2
  Retail excl. Motor Vehicles 0.4 0.3 0.8 4.0 3.2 3.6 4.1
 Merchant Wholesalers 0.4 0.8 0.2 2.2 5.5 9.2 10.5
 Manufacturing 0.4 0.2 0.3 1.7 2.4 10.2 9.8
Business Sales (%)
Total 0.2 0.3 0.6 2.9 4.4 11.0 9.7
 Retail 0.0 0.2 0.4 3.4 5.1 7.7 5.8
  Retail excl. Motor Vehicles 0.6 0.0 0.7 2.6 4.5 7.1 4.6
 Merchant Wholesalers 0.6 0.4 0.0 3.9 4.3 12.8 12.1
 Manufacturing 0.1 0.2 1.1 1.5 4.0 12.1 11.0
I/S Ratio
Total 1.29 1.29 1.29 1.29 1.29 1.27 1.28
 Retail 1.42 1.40 1.40 1.38 1.38 1.36 1.40
  Retail Excl. Motor Vehicles 1.22 1.22 1.22 1.20 1.22 1.23 1.26
 Merchant Wholesalers 1.18 1.17 1.17 1.20 1.19 1.17 1.17
 Manufacturing 1.30 1.29 1.29 1.29 1.29 1.29 1.28
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