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Economy in Brief

U.S. Wholesale Inventory Growth Outpaces Sales
by Tom Moeller  December 9, 2014

Inventories in the wholesale sector during October increased 0.4% (6.8% y/y) following an revised 0.4% September rise, earlier reported as 0.3%. Nondurable goods inventories led the gain with a 1.2% increase 4.2% y/y), paced by a 3.2% gain (20.0% y/y) in drugs & sundries. Paper & paper products inventories increased 1.6% (2.6% y/y) and groceries gained 1.1% (4.1% y/y). To the downside were petroleum inventories, off 1.9% (-17.0% y/y), and chemical inventories by 1.8% (+2.6% y/y). Durable goods inventories were roughly unchanged (8.5% y/y) as a 1.6% rise (10.7% y/y) in hardware, plumbing & heating equipment was offset by a 1.4% drop (+7.9% y/y) in motor vehicles. Furniture inventories also fell 0.7% (+3.6% y/y).

Wholesale sector sales gained 0.2% (4.3% y/y) after no change in September, last month reported a +0.2%. Durable goods sales improved 0.8% (6.0% y/y). Electronic product sales increased 1.9% (4.6% y/y) and computer equipment sales rose 1.5% (2.9% y/y). Nondurable goods sales fell 0.3% (+2.8% y/y) as petroleum sales declined 5.8% (-8.7% y/y). Chemical product sales increased 3.0% (5.9% y/y) while paper product sales rose 1.0% (4.0% y/y).

The inventory-to-sales ratio was unchanged at 1.19 for the third straight month. The durable goods ratio of 1.57 reflected 2.43 in the machinery sector and 1.02 in electronic goods. The I/S ratio for nondurable goods increased to 0.86 as apparel held at 1.90 and petroleum ticked up to 0.32.

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

Wholesale Sector - NAICS Classification (%) Oct Sep Aug Y/Y 2013 2012 2011
Inventories 0.4 0.4 0.6 6.8 4.0 5.5 9.4
Sales 0.2 0.0 -0.8 4.3 4.3 4.8 12.4
I/S Ratio 1.19 1.19 1.19 1.16 (Oct.'13) 1.17 1.18 1.15
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