Total business inventories increased 0.8% (5.3% year-on-year) during January, the second consecutive monthly gain of this magnitude (this report was delayed as a result of the government shutdown). Total business sales rose 0.3% (2.8% y/y), following a 0.9% decrease in December. The inventory-to-sales (I/S) ratio ticked up to 1.39, the fourth consecutive gain. The I/S ratio had declined to 1.33 in mid-2018. Business inventory swings can have a meaningful impact on GDP. In the second and third quarters of 2018 changes in inventories subtracted 1.2 percentage points and then added 2.3 ppt respectively. In Q4, inventories provided just a 0.1 percentage point boost.

Retail inventories increased 0.8% (4.6% y/y) in January after a 1.1% rise. Auto inventories, which comprise roughly 35% of retail inventories, grew 1.2% (9.7% y/y). Non-auto retail inventories rose 0.6% (1.8% y/y). General merchandise inventories, the second largest sector, gained 0.9% (0.5% y/y). The troubled department store sector -- a subset of general merchandise -- saw inventories decline 0.4% (-6.3% y/y); inventories plummeted a record 5.3% in November (data goes back to 1992). As reported the week before last, wholesale inventories grew 1.2% (7.7% y/y). Factory sector inventories rose 0.5% (3.7% y/y).

Retail sales rose an upwardly-revised 0.8% in January (2.6% y/y) with non-auto sales growing 1.6% (3.2% y/y). Note: the advanced retail sales data for February was released today showing a 0.2% decline (+2.1% y/y). Wholesale sector sales increased 0.5% (2.7% y/y), while shipments from the factory sector decreased 0.4% (+3.0% y/y), the fourth consecutive monthly decline.

The inventory-to-sales ratio in the retail sector was unchanged at 1.47 in January. The non-auto I/S ratio ticked down to 1.20, slightly above the historic low of 1.17 reached in November 2018 (data goes back to 1967). The wholesale sector I/S ratio increased to 1.34, its highest level since mid-2016. The manufacturing sector I/S ratio edged up to 1.36.

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