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Economy in Brief

U.S. Business Inventory Increase Led by Wholesale
by Tom Moeller  May 13, 2014

Total business inventories increased 0.4% in March (4.7% y/y) after a 0.5% February rise. The latest gain was accompanied by a 1.0% jump (4.3% y/y) in business sales after February's like rise. As a result, the inventory-to-sales ratio held steady at 1.30, nearly the highest level since 2009.

Merchant wholesale inventories jumped 1.1% (5.9% y/y). That left the I/S ratio at 1.18, up off its low but below the highs of 2012. Factory sector inventories tempered that strength with a 0.1% uptick (2.6% y/y) and the I/S ratio remained  stable at 1.30.

In the retail sector, inventories remained unchanged (6.1% y/y) in March. Retail inventories excluding autos rose 0.1% (3.9% y/y). Clothing inventories ticked 0.1% higher (2.4% y/y) as general merchandise stockpiles gained 0.2% (4.0% y/y). Building materials inventories gained 0.4% (3.3% y/y) as did food & beverage store inventories (3.6% y/y). Inventories of furniture, electronics and appliances declined 1.4% (+1.3% y/y) and motor vehicle inventories were off 0.2% (+10.8% y/y). The I/S ratio in the retail sector declined to 1.42, its lowest level since November. The nonauto I/S ratio slipped to 1.23, up off the 1.20 low early in 2012.

Business sales were strong again, posting a 1.0% rise (4.3% y/y). Merchant wholesale sales gained 1.4% (6.5% y/y). Retail sales rose a strengthened 1.5% (4.0% y/y) and excluding autos sales gained 0.9% (2.3% y/y). Shipments from the factory sector edged 0.3% higher (2.6% y/y).

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

Manufacturing & Trade (%) Mar Feb Jan Mar Y/Y 2013 2012 2011
Business Inventories 0.4 0.5 0.4 4.7 4.4 5.1 7.9
 Retail 0.0 -0.1 0.4 6.1 7.1 7.4 3.7
  Retail excl. Motor Vehicles 0.1 0.3 0.6 3.9 3.8 3.2 3.5
 Merchant Wholesalers 1.1 0.7 0.8 5.9 4.0 5.5 9.2
 Manufacturing 0.1 0.7 0.2 2.6 2.3 2.4 10.2
Business Sales (%)
Total 1.0 0.9 -1.1 4.3 3.5 4.6 10.9
 Retail 1.5 0.9 -0.9 4.0 4.4 5.1 7.7
  Retail excl. Motor Vehicles 0.9 0.4 -0.5 2.3 3.2 4.5 7.1
 Merchant Wholesalers 1.4 0.9 -1.8 6.5 4.3 4.8 12.4
 Manufacturing 0.3 0.9 -0.7 2.6 2.0 4.0 12.1
I/S Ratio
Total 1.30 1.30 1.31 1.29 1.29 1.29 1.27
 Retail 1.42 1.44 1.45 1.39 1.41 1.38 1.36
  Retail Excl. Motor Vehicles 1.23 1.24 1.24 1.21 1.22 1.21 1.23
 Merchant Wholesalers 1.18 1.19 1.19 1.19 1.17 1.18 1.15
 Manufacturing 1.30 1.30 1.30 1.30 1.29 1.29 1.29
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