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Economy in Brief

U.S. Business Inventories Remain Unchanged
by Tom Moeller  October 14, 2015

Total business inventories held steady during August (2.4% y/y) for a second month. Revisions to the July figures were minimal. These figures suggest inventories will have little effect on real GDP growth this quarter as in Q2.

Retail inventories increased 0.3% (4.5% y/y) in August, after a 0.7% jump. Motor vehicle & parts inventories advanced 0.2% (6.0% y/y). Outside of the vehicle sector, inventories gained 0.4% (3.7% y/y) paced by a 0.7% rise (6.4% y/y) in building materials. Elsewhere, increases were moderate. Furniture & home furnishings inventories gained 0.4% (-0.7% y/y) while clothing & accessory inventories also rose 0.4% (6.2% y/y). Inventories at food and beverage stores increased 0.3% (2.3% y/y) and general merchandise inventories rose 0.2% (2.8% y/y).

Merchant wholesalers inventories ticked 0.1% higher (4.1% y/y) in August, after a 0.3% decline while the value of factory sector stockpiles declined 0.3% (-0.4% y/y) for a second straight month.

August business sales declined 0.6% (-3.1% y/y) after a 0.1% uptick. The decline was paced by a 1.0% drop (-4.7% y/y) in wholesale sales followed by a 0.7% decline (-4.9% y/y) in factory sector shipments. Retail sales eased 0.1% (+0.8% y/y) following a 0.8% increase. Sales excluding motor vehicles fell 0.2% (-0.7% y/y) after a 0.6% rise.

The business sector inventory-to-sales ratio inched higher to 1.37, equaling its highest level since June 2009. The rise reflected increases in each business sector. The merchant wholesale I/S ratio rose to 1.31, its highest level since early 2009. Retailers' I/S ratio gained to 1.47, equaling its high for the economic recovery. In the manufacturing sector, the I/S ratio rose to 1.35. It has moved roughly sideways all year, staying near the recovery high.

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

Manufacturing & Trade (%) Aug Jul Jun Aug Y/Y 2014 2013 2012
Business Inventories 0.0 0.0 0.7 2.4 3.8 4.4 5.7
 Retail 0.3 0.7 1.0 4.5 2.7 7.6 7.3
  Retail excl. Motor Vehicles 0.4 0.3 0.7 3.7 2.2 5.0 3.0
 Merchant Wholesalers 0.1 -0.3 0.7 4.1 6.7 4.2 6.6
 Manufacturing -0.3 -0.3 0.3 -0.4 2.4 1.9 3.8
Business Sales (%)
Total -0.6 0.1 0.3 -3.1 3.5 3.0 5.0
 Retail -0.1 0.8 -0.1 0.8 3.9 3.7 5.0
  Retail excl. Motor Vehicles -0.2 0.6 0.4 -0.7 2.6 2.6 3.9
 Merchant Wholesalers -1.0 -0.3 0.4 -4.7 4.3 3.1 5.9
 Manufacturing -0.7 -0.2 0.6 -4.9 2.5 2.1 4.4
I/S Ratio
Total 1.37 1.36 1.36 1.30 1.31 1.29 1.27
 Retail 1.47 1.46 1.46 1.42 1.43 1.41 1.38
  Retail Excl. Motor Vehicles 1.28 1.27 1.27 1.23 1.24 1.23 1.21
 Merchant Wholesalers 1.31 1.30 1.30 1.20 1.20 1.18 1.16
 Manufacturing 1.35 1.34 1.35 1.30 1.31 1.30 1.29
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