Recent Updates

  • China: 70-City Property Prices (Sep), Capacity Utilization, GDP (Q3)
  • US: Regional Retail Sales (Sep)
  • Spain: Motor Vehicle Registrations (Sep)
  • Canada Regional: CPI by Province (Sep), Retail Trade by Province (Aug)
  • Canada: CPI (Sep), Retail Trade (Aug)
  • Ireland: General Government Debt, General Government Transactions (Q2)
  • Latvia: PPI (Sep)
  • more updates...

Economy in Brief

U.S. Business Inventories Continue Modest Growth Trend, Mixed by Sector
by Carol Stone  July 14, 2015

Total business inventories rose 0.3% in May (2.4% y/y) following an unrevised 0.4% gain in April. The consequent 3-month growth was 3.2% (AR), sustaining April's improved pace. Total business sales in May increased 0.4% (-2.2% y/y) after April's 0.5% increased, which was revised down slightly. The May gain raised the 3-month change to 6.2% (AR), its best since May 2014. As a result, the overall inventory/sales ratio for May held at 1.36, maintaining the expansion-high range of 1.36-1.37 that has prevailed during all the months of 2015.

Retailers' inventories were virtually unchanged in May (3.4% y/y) and the three-month growth rate slowed to 3.8% (AR) from 5.8% in April. General merchandise stores' inventories rose 0.5% (2.2% y/y) after April's 1.6% surge; they are up at a 5.3% rate over the last 3 months. Auto inventories fell 0.2% (+5.0% y/y/) after April's 0.9% gain; their 3-month growth was 5.9% through May. Clothing inventories edged up 0.1% (4.8% y/y), also a 5.9% annual rate during the last 3 months. Furniture inventories declined 0.3% (-1.1% y/y) and were down at a 7.3% rate from 3 months ago. Building materials and garden supply stores had a 0.2% rise in inventories, making 4.4% y/y and 3.9% annualized 3-month growth.

Merchant wholesale inventories rose 0.8% (5.0% y/y) in May. The 3-month growth rate picked up to 5.8% following a period of growth near 3%. Manufacturers' inventories were almost exactly unchanged in May (-0.6% y/y) after April's 0.2% rise. May's 3-month growth was 0.5% (AR), somewhat slower than the previous month's 0.8% pace.

Total business sales rose 0.4% in May (-2.2% y/y), a third consecutive monthly increase after seven months of declines. This brought the annualized 3-month growth rate to 6.2%. This increase included May's strong 1.1% gain in retail sales (+1.6% y/y), which were reported today to have retreated in June. Wholesale sales were up 0.3% in May (-3.8% y/y); with April's 1.7% increase, the 3-month growth came to 6.8% in May. Factory shipments were off 0.1% (-3.7% y/y) in May and grew 1.9% over the last 3 months.

The total business inventory-to-sales ratio remained stable, as noted above, at 1.36 in May, and there has been stability in the three major sectors over recent months as well. Retailers' I/S ratio was 1.45 in May, down from 1.46 in April, with the earlier months of the year at 1.46-1.47. Wholesalers' ratio is hovering around 1.29-1.30, and that for manufacturers at 1.35. For manufacturers and wholesalers, these ratios are distinctly higher than the entire post-recession period through the end of 2014, and for retailers these readings are modestly above those of the 2009-2014 span.

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

Manufacturing & Trade (%) May Apr Mar May Y/Y 2014 2013 2012
Business Inventories 0.3 0.4 0.1 2.4 3.8 4.4 5.7
 Retail 0.0 0.6 0.3 3.4 2.7 7.6 7.3
  Retail excl. Motor Vehicles 0.1 0.5 0.1 2.6 2.2 5.0 3.0
 Merchant Wholesalers 0.8 0.4 0.2 5.0 6.7 4.2 6.6
 Manufacturing 0.0 0.2 -0.1 -0.6 2.4 1.9 3.8
Business Sales (%)
Total 0.4 0.5 0.6 -2.2 3.4 3.0 5.0
 Retail 1.1 -0.1 1.6 1.6 3.6 3.9 4.8
  Retail excl. Motor Vehicles 0.9 -0.3 1.1 -0.3 2.5 2.7 3.8
 Merchant Wholesalers 0.3 1.7 -0.3 -3.8 4.3 3.1 5.9
 Manufacturing -0.1 -0.0 0.5 -3.7 2.5 2.1 4.4
I/S Ratio
Total 1.36 1.36 1.36 1.30 1.31 1.29 1.27
 Retail 1.45 1.46 1.45 1.42 1.43 1.41 1.38
  Retail Excl. Motor Vehicles 1.27 1.28 1.27 1.23 1.24 1.23 1.21
 Merchant Wholesalers 1.29 1.29 1.30 1.19 1.20 1.18 1.16
 Manufacturing 1.35 1.35 1.34 1.31 1.31 1.30 1.29
close
large image