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Economy in Brief

U.S. Business Inventories & Sales Rise Moderately
by Tom Moeller  February 14, 2018

Total business inventories increased 0.4% in December (3.2% y/y), the same as during their unrevised November reading. Total business sales gained 0.6% (6.7% y/y) after a 1.4% rise, revised from 1.2%. The changes in inventories and sales left the inventory/sales ratio steady at 1.33, the lowest level since November 2014.

Retail inventories increased 0.2% (2.3% y/y), the same as during November. Auto inventories fell 0.4% (+2.5% y/y), the fourth consecutive monthly decline. Nonauto retail inventories improved 0.5% (2.1% y/y) after two months of 0.4% increase. Grocery store inventories increased 1.0% (4.1% y/y) after a similar increase in November. Building materials inventories rose 0.4% (3.3% y/y) for the second straight month. Clothing store inventories gained 0.5% (-1.2% y/y) after eight consecutive months of decumulation while general merchandise inventories rose 0.2% (-0.7% y/y) after four months of little change. Furniture store inventories increased 1.7% (3.2% y/y) following two months of decline. As reported last week, wholesale inventories increased 0.4% (3.4% y/y) in December following a 0.6% rise. Also reported earlier, factory sector inventories strengthened 0.5% (3.8% y/y) for the second straight month.

Retail sales eased 0.1% (+5.3% y/y) following a 0.8% gain, while nonauto sales also dipped 0.1% (+6.2% y/y) after a 1.4% rise. Wholesale sector sales strengthened 1.2% (9.1% y/y) after a 1.9% rise, as shipments from the factory sector increased 0.6% (5.6% y/y), strong for the fifth straight month.

The inventory-to-sales ratio in the retail sector rose to 1.43. That left the ratio at its lowest point, however, in three years, down sharply from the 1.49 August high. The nonauto I/S ratio also ticked up to 1.21, but remained near its lowest level since early-2012. The wholesale sector I/S ratio eased to 1.22, the lowest point in three years. In the manufacturing sector, the I/S ratio held steady at 1.35, also its lowest point in three years.

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

Manufacturing & Trade Dec Nov Oct Dec Y/Y 2017 2016 2015
Business Inventories (% chg) 0.4 0.4 0.0 3.2 3.2 2.2 1.8
 Retail 0.2 0.2 0.0 2.3 2.3 3.8 4.7
  Retail excl. Motor Vehicles 0.5 0.4 0.4 2.1 2.1 1.6 3.8
 Merchant Wholesalers 0.4 0.6 -0.4 3.4 3.4 2.3 1.2
 Manufacturing 0.5 0.5 0.3 3.8 3.8 0.8 -0.1
Business Sales (% chg)
Total 0.6 1.4 0.8 6.7 6.2 -0.1 -3.2
 Retail -0.1 0.8 0.7 5.3 4.8 2.6 1.9
  Retail excl. Motor Vehicles -0.1 1.4 0.5 6.2 4.9 2.3 0.4
 Merchant Wholesalers 1.2 1.9 0.8 9.1 8.1 -0.6 -4.9
 Manufacturing 0.6 1.4 0.8 5.6 5.5 -2.0 -5.8
I/S Ratio
Total 1.33 1.33 1.34 1.37 1.38 1.40 1.38
 Retail 1.43 1.42 1.43 1.47 1.46 1.48 1.45
  Retail excl. Motor Vehicles 1.21 1.20 1.21 1.26 1.23j 1.27 1.26
 Merchant Wholesalers 1.22 1.23 1.25 1.29 1.27 1.33 1.32
 Manufacturing 1.35 1.35 1.36 1.35 1.37 1.41 1.39
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