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Economy in Brief
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The labor market firmed during November...
U.S. Consumer Credit Usage Accelerates
Consumer Credit Outstanding increased $18.90 billion (4.8% y/y during October...
U.S. Wholesale Inventories Edge Up While Sales Slump
Wholesale inventories edged up 0.1% m/m (+3.8% y/y) in October...
U.S. Trade Deficit Shrinks as Imports Fall Sharply
The U.S. trade deficit in goods and services declined to $47.20 billion during October...
U.S. Factory Sector Orders Increase; Inventory Growth Decelerates
Factory orders improved 0.3% (-1.2% y/y) during October...
by Gerald D. Cohen April 18, 2019
Total business inventories increased 0.3% (4.9% year-on-year) during February, after a slightly upwardly-revised 0.9% gain in January. Total business sales edged up 0.1% (2.4% y/y) following a 0.3% rise. The inventory-to-sales (I/S) ratio stood at 1.39 for the third consecutive month. 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 0.3% (4.3% y/y) in February after a 0.8% gain. Auto inventories, which comprise roughly 35% of retail inventories, grew 0.3% (8.6% y/y) Non-auto retail inventories rose 0.4% (1.9% y/y). General merchandise inventories, the second largest sector, declined 0.2% both for February and from a year ago. The troubled department store sector – a subset of general merchandise – saw inventories down 0.3% (-6.2% y/y); inventories plummeted a record 5.3% in November 2018 (data goes back to 1992) and have not recovered. Factory sector inventories gained 0.3% (3.6% y/y). As reported yesterday, wholesale inventories were up 0.2% (6.9% y/y).
Retail sales declined a downwardly-revised 0.3% in February (+1.9% y/y) with non-auto sales also down 0.3% (+2.0% y/y). Note: the advanced retail sales data for March was released today showing a 1.7% jump (3.5% y/y). Wholesale sector sales increased 0.3% (2.1% y/y), while shipments from the factory sector rose 0.4% (3.3% y/y) after four consecutive monthly declines.
The inventory-to-sales ratio in the retail sector edged up to 1.48 in February. The non-auto I/S ratio ticked up to 1.21 slightly above the historic low of 1.17 reached in November 2018 (data goes back to 1967). The wholesale and factory sector I/S ratios were unchanged at 1.35 and 1.36 respectively.
The manufacturing and trade data are in Haver's USECON database.
Manufacturing & Trade | Feb | Jan | Dec | Feb Y/Y | 2018 | 2017 | 2016 |
---|---|---|---|---|---|---|---|
Business Inventories (% chg) | 0.3 | 0.9 | 0.8 | 4.9 | 4.9 | 3.4 | 1.7 |
Retail | 0.3 | 0.8 | 1.1 | 4.3 | 4.2 | 2.4 | 4.1 |
Retail excl. Motor Vehicles | 0.4 | 0.7 | 1.3 | 1.9 | 1.2 | 2.2 | 1.9 |
Merchant Wholesalers | 0.2 | 1.2 | 1.1 | 6.9 | 7.1 | 3.3 | 1.9 |
Manufacturing | 0.3 | 0.5 | 0.1 | 3.6 | 3.5 | 4.5 | -0.7 |
Business Sales (% chg) | |||||||
Total | 0.1 | 0.3 | -0.9 | 2.4 | 6.1 | 5.6 | -0.8 |
Retail | -0.3 | 0.8 | -1.8 | 1.9 | 4.7 | 5.0 | 2.5 |
Retail excl. Motor Vehicles | -0.3 | 1.6 | -2.5 | 2.0 | 5.4 | 5.0 | 2.0 |
Merchant Wholesalers | 0.3 | 0.5 | -0.7 | 2.1 | 6.6 | 6.7 | -1.3 |
Manufacturing | 0.4 | -0.3 | -0.2 | 3.3 | 6.8 | 5.0 | -3.2 |
I/S Ratio | |||||||
Total | 1.39 | 1.39 | 1.39 | 1.36 | 1.36 | 1.38 | 1.42 |
Retail | 1.48 | 1.47 | 1.47 | 1.45 | 1.44 | 1.47 | 1.49 |
Retail excl. Motor Vehicles | 1.21 | 1.20 | 1.21 | 1.21 | 1.20 | 1.24 | 1.28 |
Merchant Wholesalers | 1.35 | 1.35 | 1.34 | 1.29 | 1.29 | 1.30 | 1.35 |
Manufacturing | 1.36 | 1.36 | 1.35 | 1.36 | 1.35 | 1.37 | 1.41 |