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Economy in Brief

U.S. Wholesale Inventories and Sales Rise
by Tom Moeller  January 10, 2018

Wholesale inventories increased 0.8% (3.9% y/y) during November following a 0.4% October decline, revised from -0.5%. In the advance report issued on December 28, wholesale inventories were reported up 0.7% m/m in November.

Inventories of nondurable goods jumped 1.3% (2.1% y/y). The value of farm product raw materials inventories rebounded 4.3% (4.0% y/y) but apparel inventories eased 0.1% (-4.1% y/y). Inventories of petroleum strengthened 4.9% (9.6% y/y) with higher prices but chemical inventories fell minimally (+3.9% y/y). Durable goods inventories increased 0.5% (5.1% y/y) as electrical equipment inventories rose 1.5% (9.6% y/y) and machinery inventories strengthened 1.0% (3.3% y/y). Motor vehicle inventories gained 0.7% (3.0% y/y). Offsetting these gains, furniture & home furnishing inventories eased 0.2% (+2.2% y/y) and computer equipment inventories fell 0.1% (+4.0% y/y).

Sales at the wholesale level strengthened 1.5% (9.7% y/y) in November after a 0.8% increase. A 0.6% m/m rise had been expected in the Action Economics Forecast Survey.

Nondurable goods purchases increased 1.4% (7.6% y/y) as petroleum sales gained 6.4% (30.0% y/y). Chemical product sales rose 0.5% (8.6% y/y) but farm product sales eased 0.8% (-4.0% y/y). Apparel sales declined 0.5% (+1.8% y/y). Durable goods sales increased 1.6% (12.0% y/y) reflecting a 3.2% rise (14.9% y/y) in machinery sales and a 1.3% rise (15.6% y/y) in motor vehicle purchases. Electrical equipment sales rose 1.4% (11.2% y/y) but furniture sales ticked just 0.1% higher (-2.5% y/y).

The inventory-to-sales ratio at the wholesale level eased to 1.24 in November, its lowest reading in three years and down from a February 2016 high of 1.36.

The I/S ratio for durable goods continued its decline, falling to 1.57; well below its recent peak of 1.74 in January 2016. The metals ratio rose to 2.11, but the motor vehicle ratio eased to 1.65. The electrical equipment ratio was stable at 1.00, and the computer equipment ratio fell to 0.84. The I/S ratio for nondurables goods held steady in November at 0.93. The apparel industry ratio was stable at 1.99 and the grocery ratio held at 0.67. The petroleum industry ratio eased to 0.38.

The wholesale trade figures are available in Haver's USECON database. The Action Economic Survey results are contained in AS1REPNA.

Wholesale Sector - NAICS Classification (%) Nov Oct Sep Nov Y/Y 2016 2015 2014
Inventories 0.8 -0.4 0.1 3.9 2.6 1.1 5.8
Sales 1.5 0.8 1.4 9.7 -0.4 -4.9 3.6
I/S Ratio 1.24 1.25 1.26 1.31 (Nov '16) 1.33 1.32 1.21
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