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Economy in Brief

U.S. Wholesale Inventory Accumulation Eases
by Tom Moeller  March 10, 2015

Inventories at the wholesale level in January gained 0.3% (6.2% y/y) following little change in December, revised from 0.1%. Durable goods inventories rose 0.6% (7.7% y/y). Electrical equipment inventories were quite strong and increased 2.4% (10.2% y/y) while motor vehicle inventories jumped 1.6% (8.7% y/y). Furniture inventories also posted a firm 1.2% rise (7.0% y/y). These gains were offset y a 0.1% slip (+3.7% y/y) in nondurable goods inventories, restrained by a 1.1% drop (-20.8% y/y) in the value of petroleum inventories. Apparel inventories surged 1.1% (5.8% y/y) but chemical inventories declined 1.0% (+1.1% y/y).

Wholesale sector sales fell 3.1% (-1.0% y/y) following three months of decline. A 0.4% decline was expected in the Action Economics Forecast Survey. Durable goods sales were off 1.4% (+5.8% y/y), led lower by a 4.4% decline (+8.4% y/y) in electrical equipment. Furniture sales fell 2.6% (+9.2% y/y) but motor vehicles sales rose 2.5% (10.2% y/y). Nondurable goods sales declined 4.6% (-6.7% y/y), led lower by a 13.5% shortfall (-37.1% y/y) in petroleum shipments as prices fell. Chemical shipments were off 3.4% (-2.5% y/y) and apparel sales slipped 0.6% (+9.0% y/y).

The inventory-to-sales ratio surged to 1.27, its highest level since July 2009. The durable goods I/S ratio rose moderately to 1.61, also the highest since 2009, but the nondurable ratio surged to 0.94, also near the 2009 high. The petroleum ratio's rise was sharp but so too was the rise in chemicals & apparel.

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

Wholesale Sector - NAICS Classification (%) Jan Dec Nov Y/Y 2014 2013 2012
Inventories 0.3 -0.0 0.8 6.2 6.7 4.3 5.5
Sales -3.1 -0.9 -0.4 -1.0 5.0 4.4 4.8
I/S Ratio 1.27 1.22 1.21 1.18 (Jan.'14) 1.19 1.17 1.18
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