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Economy in Brief

U.S. Wholesale Inventories Jump As Sales Decline
by Tom Moeller  January 12, 2015

Inventories at the wholesale level during November jumped 0.8% following a 0.6% October rise, earlier reported as 0.4%. Durable goods inventories led the gain with a 0.8% increase (7.1% y/y). It reflected a 2.6% rise (15.1% y/y) in computer equipment, a 1.3% gain (8.8% y/y) in electrical equipment and a 0.9% increase (9.7% y/y) in machinery. Nondurable goods inventories rose 0.7% (4.4% y/y) driven by a 5.7% surge (-7.4% y/y) in farm products and a 0.4% rise in chemicals. Petroleum inventories fell 3.7% (-15.5% y/y). Paper & products inventories were off 2.0% (+0.9% y/y) and apparel inventories dropped 1.2% (+7.9% y/y).

Wholesale sector sales fell 0.3% (+2.4% y/y) reflecting a 0.8% decline (-0.8% y/y) in nondurables. Chemical sales were off 4.1% (+0.1% y/y), petroleum sales declined 0.5% (-14.1% y/y) and paper & products sales fell 0.6% (+4.0% y/y). These declines were offset by sales of durable goods which rose 0.2% (6.3% y/y), led by a 2.4% rise (8.3% y/y) in electrical & electronic goods and a 1.8% gain (9.6% y/y) in furniture sales. To the downside were metals sales by 1.2% (+14.9% y/y) and machinery sales which fell 0.5% (+8.0% y/y).

The inventory-to-sales ratio ticked up to 1.21, its highest level since October 2009. The nondurable goods ratio jumped to 0.87, its highest point since April 2013, reflecting higher ratios for chemicals, raw farm products and chemicals. The durable goods ratio was stable at 1.58 for the third straight month. Increases in machinery and metal were offset by declines in furniture (to the lowest level since 2007) and electronic products.

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

Wholesale Sector - NAICS Classification (%) Nov Oct Sep Y/Y 2013 2012 2011
Inventories 0.8 0.6 0.4 7.1 4.0 5.5 9.4
Sales -0.3 -0.0 0.0 2.4 4.3 4.8 12.4
I/S Ratio 1.21 1.20 1.19 1.16 (Nov.'13) 1.17 1.18 1.15
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