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Economy in Brief

U.S. Wholesale Sales and Inventories Are Strong
by Tom Moeller  May 9, 2014

Wholesale sales jumped 1.4% (6.5% y/y) during March following February's 0.9% gain, last month set at 0.8%. Nondurable goods sales increased 1.5% (7.9% y/y) as farm product sales surged 6.0% (-0.4% y/y). Grocery product sales also logged strength with a 3.2% increase (10.1% y/y) and apparel sales gained 2.3% (9.0% y/y). These gains were offset by a 0.4% drop (+7.4% y/y) in chemical sales and a 0.2% slip (+13.9% y/y) in petroleum sales. Durable goods sales increased 1.4% (4.9% y/y) led by a 4.2% spurt (5.7% y/y) in electrical products. Not far behind was a 2.2% rise (6.8% y/y) in metals sales and a 1.2% improvement (2.9% y/y) in professional equipment sales. Offsetting these gains was a 0.6% decline (+7.6% y/y) in furniture sales which was the fourth consecutive monthly fall. Also, automotive shipments were little-changed (1.5% y/y).

Inventories at the wholesale level increased 1.1% (5.9% y/y) during March following a little-revised 0.7% February gain. The strength owed to a 1.7% rise (5.4% y/y) in the nondurable goods sector. That was driven by a 3.3% jump (-3.6% y/y) in petroleum inventories and a 3.1% gain (1.2% y/y) in farm products. Inventories of groceries increased 2.5% (2.0% y/y) while apparel inventories were up 1.6% (5.2% y/y). Durable goods inventories gained 0.7% (6.2% y/y). Motor vehicle inventories increased 1.9% (9.5% y/y) while professional equipment inventories rose 1.2% (6.1% y/y). Electrical equipment inventories gained 0.6% (1.5% y/y) and machinery improved 0.5% (11.5% y/y).

The wholesale sector's inventory-to-sales ratio slipped m/m to 1.18 but it's risen from 1.16 at year-end. In the durable goods sector, the I/S ratio inched lower to 1.59 versus its recent 1.60 high. The machinery ratio was strong at 2.49 and it was firm in furniture at 1.66. In the nondurables sector, the I/S ratio of 0.84 was down slightly versus last year. The 1.95 ratio in apparel contrasted with 0.31 in petroleum.

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

Wholesale Sector - NAICS Classification (%) Mar Feb Jan Y/Y 2013 2012 2011
Inventories 1.1 0.7 0.8 5.9 4.0 5.5 9.4
Sales 1.4 0.9 -1.8 6.5 4.3 4.8 12.4
I/S Ratio 1.18 1.19 1.19 1.19 (Mar'13) 1.17 1.18 1.15
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