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Economy in Brief

U.S. Wholesale Inventory Accumulation Continues to Strengthen
by Tom Moeller  October 9, 2015

Inventories at the wholesale level increased 0.9% during June (5.4% y/y) following a 0.6% May gain, revised from 0.8%. The rise was paced by a 2.0% jump (15.0% y/y) in automotive products inventories and a 1.5% rise in furniture (7.8% y/y). Computer & peripherals declined 2.1% (+1.8% y/y) but electrical goods inventories improved 0.1% (+6.5% y/y. Nondurable goods inventories increased 2.3% (5.4% y/y). The gain reflected a 3.6% rise (-17.7% y/y) in petroleum and a 2.0% increase in apparel (12.1% y/y). Chemical inventories rose 1.8% (0.5% y/y).

Sales in the wholesale sector improved 0.1% last month (-0.5% y/y) after a 0.2% rise. Furniture sales increased 3.6% (13.6% y/y) but motor vehicle sales dropped 2.8% (+5.3% y/y). Machinery equipment sales were off 2.2% (-0.3% y/y). Nondurable goods sales increased 1.2% (-2.7% y/y) as petroleum sales strengthened 3.7% (-27.8% y/y). Chemical sales rose 1.4% (1.5% y/y) but apparel sales ticked just 0.1% higher (4.8% y/y).

The inventory to sales ratio recovered to 1.30 and equaled the Q1 average. The motor vehicle ratio jumped to 1.73, the highest level of the economic expansion. The ratio for furniture & home furnishings pulled back to 1.62 and has moved sideways this year. The nondurable goods ratio held fairly steady at 0.96 reflecting 2.07 in apparel and 0.40 in petroleum.

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

Wholesale Sector - NAICS Classification (%) Aug Jul Jun Y/Y 2014 2013 2012
Inventories 0.1 -0.3 0.7 4.1 6.7 4.1 6.6
Sales -1.0 -0.3 0.4 -5.0 4.3 3.0 6.2
I/S Ratio 1.31 1.30 1.30 1.20 (Aug. '14) 1.20 1.18 1.16
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