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Economy in Brief

Wholesale Inventories and Sales Increase Modestly
by Tom Moeller  November 9, 2018

Wholesale inventories increased 0.4% (5.2% y/y) during September following a 0.9% August rise, revised from 1.0%. The September gain compared to a 0.3% rise expected in the Informa Global Markets Survey and a 0.4% increase reported in the advance report issued two weeks ago.

Durable goods inventories increased 0.8% (6.8% y/y) after a 1.0% gain. Automotive inventories surged 1.4% (2.6% y/y) and computer & office equipment inventories strengthened 1.9% (9.7% y/y). Machinery & equipment inventories rose 0.7% (9.1% y/y). Furniture inventories gained 0.2% (2.2% y/y) while electrical goods inventories improved 0.9% (4.1% y/y). Inventories of nondurable goods declined 0.4% (+2.8% y/y) as the value of farm product inventories fell 3.8% (+13.5% y/y). Paper product inventories were off 0.3% (+7.9% y/y) and chemical inventories eased 0.1% (+7.6% y/y). To the upside, petroleum inventories increased 5.0% (13.1% y/y). Apparel inventories rose 0.8 (-2.1% y/y) and grocery product inventories improved slightly (-2.5% y/y).

Wholesale sales increased 0.2% during September (7.8% y/y) after a 0.7% August rise, revised from 0.8%. The Action Economics Forecast Survey looked for a 0.4% m/m increase.

Sales of durable goods held steady (7.9% y/y) as computer equipment sales declined 4.2% (+1.5% y/y). This was countered by a 1.0% rise (16.8 y/y) in machinery purchases. Sales of furniture eased 0.3% (4.2% y/y), but hardware sales rose 2.1% (6.1% y/y). Automotive sales fell 0.6% (+4.0% y/y). Nondurable goods purchases gained 0.3% (7.7% y/y). Petroleum sales increased 2.4% (24.5% y/y) and chemical sales rose 1.7% (9.7% y/y). Apparel sales declined 2.3% (-6.6% y/y).

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

The I/S ratio for durable goods rose slightly to 1.59 after three months at 1.58. The machinery sector's ratio slipped to 2.52. The furniture sector's I/S ratio held at 1.81 while auto's ratio rose to 1.60. The nondurable goods I/S ratio slipped to 0.95 as the apparel ratio increased to 2.18. The paper products ratio slipped to 1.24 and the petroleum sector's ratio was steady at 0.38. The grocery product I/S ratio improved to 1.71.

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 (%) Sep Aug Jul Sep Y/Y 2017 2016 2015
Inventories 0.4 0.9 0.6 5.2 3.6 2.2 1.3
Sales 0.2 0.7 0.2 7.8 7.4 -1.3 -4.9
I/S Ratio 1.26 1.26 1.26 1.29 (Sep. '17) 1.30 1.35 1.33
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