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Economy in Brief

U.S. Wholesale Inventory Accumulation Improves
by Tom Moeller  November 10, 2015

Inventories at the wholesale level rose 0.5% during September (4.5% y/y) following a 0.3% August increase. The rise was paced by a 1.3% jump (8.4% y/y) in furniture and a 0.5% rise (12.8% y/y) in automotive inventories.. Computer & peripherals fell 1.7% (+1.8% y/y) and electrical goods inventories eased 0.3% (+5.4% y/y. Nondurable goods inventories increased 1.9% (7.5% y/y). The gain reflected a 2.3% rise (14.4% y/y) in apparel but petroleum inventories eased 0.6% (-18.2% y/y). Chemical inventories declined 1.6% (+4.0% y/y).

Sales in the wholesale sector improved 0.5% (-3.6% y/y) after two months of decline. Motor vehicle sales jumped 2.3% (5.9% y/y) though furniture purchases were off 2.7% (+4.6% y/y). Machinery equipment sales improved 0.2% (-3.6% y/y). Nondurable goods sales increased 0.3% (-6.1% y/y) as apparel sales gained 1.9% (6.3% y/y). Chemical sales improved 0.5% (-2.9% y/y) but petroleum sales declined 4.6% (-39.1% y/y).

The inventory to sales ratio held steady at 1.31, up sharply from 1.14 averaged in 2010 and 2011. The motor vehicle ratio eased to 1.73, but remained near the expansion high. The ratio for furniture & home furnishings jumped to 1.68 but has moved erratically sideways during the expansion. The nondurable goods ratio surged to 1.00, the highest level since 2001 due to strength across several industries.

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

Wholesale Sector - NAICS Classification (%) Sep Aug Jul Y/Y 2014 2013 2012
Inventories 0.5 0.3 -0.3 4.5 6.7 4.1 6.6
Sales 0.5 -0.9 -0.3 -3.6 4.3 3.0 6.2
I/S Ratio 1.31 1.31 1.30 1.20 (Sep. '14) 1.20 1.18 1.16
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