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Economy in Brief

U.S. Business Inventories Are Little-Changed M/M; I/S Ratios Trend Higher
by Tom Moeller  December 11, 2015

Total business inventories posted a negligible decline during October (2.0% y/y) following a 0.1% September rise.

Retail inventories gained 0.1% (5.0% y/y) after a 0.8% increase. Motor vehicle & parts inventories eased 0.4% (+6.5% y/y) but growth had been accelerating all year. Outside of the vehicle sector, retail inventories gained 0.4% (4.2% y/y) after two months of 0.5% increase. Building materials grew 1.1% (6.5% y/y) and food and beverage store inventories increased 0.3% (2.5% y/y). General merchandise store inventories rose 0.3% (3.4% y/y) for a third straight month. Furniture & home furnishings inventories declined 0.7% (+1.6% y/y) and clothing store inventories eased 0.1% (+5.2% y/y).

Merchant wholesalers inventories eased 0.1% (+3.6% y/y) while the value of factory sector stockpiles also fell 0.1% (-1.8% y/y), down for the fourth straight month.

Business sales during October eased 0.2% (-2.7% y/y) after remaining unchanged. The reading reflected unchanged retail and wholesale sales. Factory sector sales declined 0.5%.

The business sector inventory-to-sales ratio rose to 1.38, equaling its highest level since June 2009. The rise reflected stability in the retail sector at 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 (%) Oct Sep Aug Oct Y/Y 2014 2013 2012
Business Inventories -0.0 0.1 0.1 2.0 3.9 4.3 5.8
 Retail 0.1 0.8 0.5 5.0 2.7 7.6 7.4
  Retail excl. Motor Vehicles 0.4 0.5 0.5 4.2 2.2 4.9 2.9
 Merchant Wholesalers -0.1 0.2 0.3 3.6 6.7 4.2 6.6
 Manufacturing -0.1 -0.5 -0.4 -1.8 2.4 1.7 3.8
Business Sales (%)
Total -0.2 0.0 -0.6 -2.7 3.5 2.8 5.2
 Retail 0.0 -0.1 -0.0 1.1 3.5 3.8 4.9
  Retail excl. Motor Vehicles 0.1 -0.6 -0.1 -0.5 2.6 2.6 3.9
 Merchant Wholesalers -0.0 0.5 -0.9 -3.7 4.3 3.0 6.2
 Manufacturing -0.5 -0.3 -0.9 -4.7 2.6 1.9 4.7
I/S Ratio
Total 1.38 1.37 1.37 1.31 1.31 1.29 1.27
 Retail 1.48 1.48 1.47 1.43 1.43 1.41 1.38
  Retail Excl. Motor Vehicles 1.29 1.29 1.28 1.24 1.24 1.23 1.21
 Merchant Wholesalers 1.31 1.31 1.31 1.22 1.20 1.18 1.16
 Manufacturing 1.35 1.35 1.35 1.32 1.31 1.30 1.29
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