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Economy in Brief

U.S. Business Inventories Increase Slows
by Tom Moeller  January 14, 2014

Total business inventories increased 0.4% in November (4.0% y/y), the slowest increase in three months. This inventory rise accompanied a 0.8% jump (4.0% y/y) in business sales after October's 0.5% increase. As a result, the inventory-to-sales ratio remained at 1.29, where it's been since April.

In the retail sector, inventories advanced 0.8% (7.3% y/y) in November, including a 1.3% jump (13.7% y/y) in motor vehicles. Inventories excluding autos rose 0.6% (4.4% y/y). Inventories of furniture, electronics and appliances rose 0.6% (-1.9% y/y) while building materials also increased 0.6% (3.9% y/y). Food & beverage store inventories gained a like 0.6% (3.7% y/y) while apparel store inventories recovered 0.5% (2.9% y/y). General merchandise stores' inventories increased 0.5% (6.3% y/y). The retail inventory-to-sales ratio was stable m/m at 1.43.

Merchant wholesale inventories improved by 0.5% (3.3% y/y). Durable goods inventories rose 0.5% (4.2% y/y). Nondurable goods distributors inventories rose 0.5% (2.0% y/y), again led higher by a 6.6% rise (-13.7% y/y) in farm products. Wholesalers' inventory-to-sales ratio dipped m/m to 1.17, its lowest level since April 2012. Factory sector inventories were unchanged (1.8% y/y) for the second month while the inventory-to-sales ratio slipped to 1.28.

November business sales improved 0.8% (4.0% y/y). Wholesale sales again led the gain with a 1.0% increase (5.5% y/y). Shipments from the factory sector also jumped 1.0% (2.6% y/y). Retail sales improved 0.3% (4.0% y/y) while sales less autos dipped 0.1% (+2.6% y/y).

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

Business Inventories (%) Nov Oct Sep Nov Y/Y 2012 2011 2010
Total 0.4 0.8 0.6 4.0 5.1 7.9 8.8
 Retail 0.8 1.1 1.0 7.3 8.0 3.9 6.2
  Retail excl. Motor Vehicles 0.6 0.3 0.4 4.4 3.2 3.6 4.1
 Merchant Wholesalers 0.5 1.3 0.5 3.3 5.5 9.2 10.5
 Manufacturing 0.0 0.0 0.3 1.8 2.4 10.2 9.8
Business Sales (%)
Total 0.8 0.5 0.3 4.0 4.4 11.0 9.7
 Retail 0.3 0.4 0.0 4.0 5.1 7.7 5.8
  Retail excl. Motor Vehicles -0.1 0.2 0.4 2.5 4.5 7.1 4.6
 Merchant Wholesalers 1.0 1.1 0.8 5.5 4.3 12.8 12.1
 Manufacturing 1.0 0.1 0.1 2.6 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 1.43 1.43 1.42 1.39 1.38 1.36 1.40
  Retail Excl. Motor Vehicles 1.23 1.22 1.22 1.20 1.22 1.23 1.26
 Merchant Wholesalers 1.17 1.18 1.18 1.20 1.19 1.17 1.17
 Manufacturing 1.28 1.29 1.29 1.29 1.29 1.29 1.28
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