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Economy in Brief

U.S. Wholesale Inventories and Sales Continue to Rise
by Tom Moeller  April 17, 2019

Wholesale inventories increased 0.2% (6.9% y/y) during February following a 1.2% gain in January. The Informa Global Markets Survey expected a 0.5% rise.

Durable goods inventories increased 0.1% (10.6% y/y) after a 0.8% gain. Machinery inventories, the largest sector, grew 0.7% (12.6% y/y), while motor vehicle inventories nudged 0.1% higher (9.4% y/y). Electrical equipment inventories also rose 0.1% (10.6% y/y). Inventories of nondurable goods gained 0.3% (1.4% y/y) after rising 1.8% in January. Drug inventories, which make up a quarter of nondurable inventories, rose 1.7% (1.0% y/y). Groceries, the second largest category, gained 0.3% (1.0% y/y). Apparel inventories increased 1.8% (10.1% y/y) but petroleum inventories fell 1.3% (-7.2% y/y).

Wholesale sales grew 0.3% during February (2.1% y/y) after a 0.5% increase. The increase matched expectations in the Action Economics Forecast Survey.

Durable goods sales rose 0.1% (3.2% y/y) after a 0.2% increase. Electrical equipment sales, the largest sector, rebounded 1.5% (3.5% y/y) following a sharp January decline. Professional and commercial equipment, which includes computers, rose 0.6% (3.0% y/y). Vehicle sales improved 0.3% (2.2% y/y). Nondurable product sales rose 0.4% (1.1% y/y) after a 0.9% rise. Petroleum product sales increased 2.9% (-0.6% y/y). Drug purchases grew 0.2% (6.7% y/y) and apparel sales rose 1.4% (-2.0% y/y). Chemical sales jumped 2.7% (2.4% y/y) after three months of sharp decline.

The inventory-to-sales (I/S) ratio held steady at 1.35, but recently has been trending higher. The I/S ratio for durable goods was unchanged at 1.71, the highest level since early-2016. The machinery ratio surged to 2.69 but motor vehicles eased to 1.72. The I/S ratio for nondurable goods held steady at 1.0. The petroleum industry I/S ratio slipped to 0.37. The apparel industry I/S ratio held at the expansion high of 2.23, but the chemical industry ratio slipped to 1.12.

The wholesale trade figures and oil prices 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 (%) Feb Jan Dec Feb Y/Y 2018 2017 2016
Inventories 0.2 1.2 1.1 6.9 7.1 3.3 1.9
Sales 0.3 0.5 -0.7 2.1 6.6 6.7 -1.3
I/S Ratio 1.35 1.35 1.34 1.29 (Feb '18) 1.28 1.29 1.35
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