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Economy in Brief
U.S. Housing Affordability Declines Further in June
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U.S. Producer Prices Fall During July; Core Increase Weakens
The Producer Price Index for Final Demand fell 0.5% during July...
U.S. Unemployment Claims Continue on an Uptrend
Initial claims for unemployment insurance filed in the week ended August 6 rose 14,000 to 262,000...
RICS Survey Points to More U.K. Housing Sector Weakness
The survey of housing market conditions in the U.K. continues to show strength in prices versus weakness...
Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
by Gerald D. Cohen July 11, 2018
Wholesale trade inventories grew 0.6% (5.9 year-on-year) in May following an unrevised 0.1% April gain. The May reading matched the increase reported in the advance report released on June 27 and compared to the 0.5% growth expected by the Informa Global Markets Survey.
Durable goods inventories rose 0.5% (6.1% y/y) in May following a 0.2% rise in April. Machinery inventories, the largest sector, increased1.5% (6.9% y/y), while vehicles, the second largest, decreased 1.2% (+3.0% y/y). Electrical equipment grew 0.7% (8.2% y/y). Inventories of nondurable goods gained 0.7% (5.7% y/y) following an unchanged reading. Drug inventories, which make up a quarter of nondurable inventories, rebounded 2.1% (2.9% y/y) following a 2.2% drop in April. Groceries, the second largest category, edged up 0.2% (-0.1% y/y). Miscellaneous nondurables fell 0.6% (+4.3% y/y) the third consecutive monthly decline.
Sales at the wholesale level jumped 2.5% (11.8% y/y) in May following a 1.4% upwardly revised gain. A 0.6% May rise had been expected in the Action Economics Forecast Survey.
Durable goods sales increased 1.9% (10.5% y/y) after a 1.1% gain. Electrical equipment, the largest sector, rebounded 2.2% (8.6% y/y) more than reversing April’s 1.8% drop. Professional and commercial equipment, which includes computers, grew 2.4% (8.9% y/y), while vehicle sales climbed 2.9% (10.3% y/y). Nondurable product sales surged 3.1% (13.1% y/y) after a 1.6% rise. Petroleum product sales, the largest category, leapt 8.3% (51.8% y/y) fueled by a 6.4% (41.2% y/y) jump in oil prices. Drug sales grew 1.6% (6.9% y/y) while groceries edged up 0.1% (-3.2% y/y).
The inventory-to-sales (I/S) ratio at the wholesale level fell to 1.24 in May, the second consecutive monthly decline. This is the lowest level since November 2014.
The I/S ratio for durable goods decreased to 1.56 from 1.58, the lowest since September 2013. The machinery ratio was unchanged at its six year low of 2.57 while motor vehicles dropped to 1.55 from 1.62. The I/S ratio for nondurable goods declined to 0.95 the lowest since December 2014. The petroleum industry I/S ratio contracted to 0.39 also a three-and-a-half year low. The drug industry I/S edged up to 1.06.
The wholesale trade figures are available in Haver's USECON database. The expectations figure for inventories is contained in the MMSAMER database. Expectations for sales are from the AS1REPNA database.
Wholesale Sector - NAICS Classification (%) | May | Apr | Mar | Y/Y | 2017 | 2016 | 2015 |
---|---|---|---|---|---|---|---|
Inventories | 0.6 | 0.1 | 0.2 | 5.9 | 3.6 | 2.2 | 1.3 |
Sales | 2.5 | 1.4 | 0.4 | 11.8 | 7.4 | -1.3 | -4.9 |
I/S Ratio | 1.24 | 1.27 | 1.29 | 1.31 (May '17) | 1.30 | 1.35 | 1.33 |