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Economy in Brief

U.S. Business Inventories Accumulate
by Tom Moeller  November 13, 2015

Total business inventories increased 0.3% during September (2.4% y/y) following a 0.1% August rise. It was the strongest monthly gain in three months but left y/y growth of 2.4% at its lowest since 2010.

Retail inventories jumped 0.8% in September (5.1% y/y) after a 0.5% increase. Motor vehicle & parts inventories jumped 1.4% (7.3% y/y) and growth has been accelerating all year. Outside of the vehicle sector, inventories gained 0.5% (4.2% y/y) for a second month. Growth here also has accelerated sharply this year. During September it was paced by a 1.0% gain in furniture & home furnishings inventories. Building materials grew 0.6% (6.1% y/y) and food and beverage store inventories increased 0.4% (2.7% y/y). Clothing & department store inventories grew 0.3% (6.0% y/y) and general merchandise store inventories were little changed (2.4% y/y) for a third straight month.

Merchant wholesalers inventories increased 0.5% (4.5% y/y) in September while the value of factory sector stockpiles declined 0.4% (-1.7% y/y), about as they have for three straight months.

Business sales during September remained unchanged (-2.7% y/y) after a 0.6% decline. The reading reflected wholesale sales which increased 0.5% (-3.6% y/y). Retail sales eased slightly (+1.7% y/y) but excluding motor vehicles, they fell 0.4% (-0.2% y/y). Factory sector sales also fell 0.4% (-5.0% y/y).

The business sector inventory-to-sales ratio inched higher to 1.38, equaling its highest level since June 2009. The rise reflected an uptick in the retail sector to 1.48, its highest level since May 2009. The merchant wholesale I/S ratio of 1.31 equaled its highest since 2009 as did the factory sector ratio of 1.35. 

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

Manufacturing & Trade (%) Sep Aug Jul Sep Y/Y 2014 2013 2012
Business Inventories 0.3 0.1 0.0 2.4 3.9 4.3 5.8
 Retail 0.8 0.5 0.7 5.1 2.8 7.6 7.4
  Retail excl. Motor Vehicles 0.5 0.5 0.3 4.2 2.2 4.9 2.9
 Merchant Wholesalers 0.5 0.3 -0.3 4.5 6.7 4.1 6.6
 Manufacturing -0.4 -0.4 -0.3 -1.7 2.4 1.7 3.8
Business Sales (%)
Total 0.0 -0.6 0.1 -2.7 3.5 2.8 5.2
 Retail -0.0 0.0 -0.0 1.7 3.7 3.8 4.9
  Retail excl. Motor Vehicles -0.4 -0.1 0.6 -0.2 2.6 2.6 3.9
 Merchant Wholesalers 0.5 -0.9 -0.3 -3.6 4.3 3.0 6.2
 Manufacturing -0.4 -0.9 -0.2 -5.0 2.6 1.9 4.7
I/S Ratio
Total 1.38 1.37 1.36 1.31 1.31 1.29 1.27
 Retail 1.48 1.47 1.46 1.43 1.43 1.41 1.38
  Retail Excl. Motor Vehicles 1.29 1.28 1.27 1.23 1.24 1.23 1.21
 Merchant Wholesalers 1.31 1.31 1.30 1.20 1.20 1.18 1.16
 Manufacturing 1.35 1.35 1.34 1.30 1.31 1.30 1.29
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