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Economy in Brief

Wholesale Inventories and Sales Strengthen
by Tom Moeller  October 10, 2018

Wholesale inventories jumped 1.0% during August (5.1% y/y) following an unrevised 0.6% July increase. The August gain compared to 0.8% expected in the Informa Global Markets Survey. The rise compared to the 0.7% increase reported in advance report issued two weeks ago.

Durable goods inventories increased 0.9% (6.1% y/y) after a 0.6% gain. Automotive inventories surged 3.5% (0.4% y/y) and computer & office equipment inventories gained 1.6% (4.3% y/y). Machinery & equipment inventories rose 0.5% (8.6% y/y). Furniture inventories gained 0.1% (2.5% y/y) but electrical goods inventories eased 0.4% (+3.6% y/y). Inventories of nondurable goods strengthened 1.2% (3.9% y/y) powered by a 2.2% surge (8.8% y/y) in chemical inventories. Petroleum inventories rose 0.5% (8.5% y/y) and paper product inventories increased 0.3% (9.9% y/y). Apparel inventories inched 0.1% higher (-2.7% y/y), but grocery product inventories fell 0.7% (-22.7% y/y), off for the third straight month.

Wholesale sales increased 0.8% during August (9.2% y/y) after a 0.2% gain, revised from no change. The Action Economics Forecast Survey looked for a 0.5% m/m increase.

Sales of durable goods jumped 1.3% (9.0% y/y) as computer equipment sales surged 6.2% (4.9% y/y). Machinery sales rose 1.1% (18.0% y/y). Sales of furniture increased 0.9% (4.2% y/y) and hardware sales rose 0.7% (8.4% y/y). Sales of nondurable goods gained 0.5% (9.4% y/y). Apparel sales rebounded 2.2% (-3.4% y/y) after a 6.7% decline. Petroleum sales increased 1.0% (35.8% y/y) but chemical sales fell 1.1% (+10.6% y/y).

The inventory-to-sales (I/S) ratio at the wholesale level held steady m/m at 1.26 in August. This remained the second lowest reading since December 2014.

The I/S ratio for durable goods held at 1.58 for the third straight month. The machinery sector's rate slipped to 2.53. The furniture sector's I/S ratio eased to 1.81 while auto's ratio fell to 1.58. The nondurable goods I/S ratio inched up to 0.96 as the apparel ratio eased to 2.10. The paper products ratio held steady at 1.24 and the petroleum sector's ratio was steady at 0.37.

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 in the AS1REPNA database.

Wholesale Sector - NAICS Classification (%) Aug Jul Jun Y/Y 2017 2016 2015
Inventories 1.0 0.6 0.1 5.1 3.6 2.2 1.3
Sales 0.8 0.2 -0.2 9.2 7.4 -1.3 -4.9
I/S Ratio 1.26 1.26 1.25 1.30 (Aug '17) 1.30 1.35 1.33
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