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Economy in Brief
Composite PMIs Step Back But Most Still Show Expansion
The S&P global composite PMIs took a turn for the worse in June...
U.S. ISM Manufacturing Index Falls Back in June to the Lowest Level in Two Years
The ISM U.S. manufacturing PMI fell to 53.0 in June...
U.S. Construction Spending Unexpectedly Dips in May After Seven Straight Monthly Rises
The value of construction put-in-place ticked down 0.1% m/m (+9.7% y/y) in May...
Developed Economies Manufacturing Sectors Hit Hard in June
Among the 18 countries in the table that report manufacturing PMI data in June, only four show m/m improvements...
U.S. Income Gained, Spending Slowed in May
Personal income growth remained solid while household spending slowed in May...
Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
by Gerald D. Cohen June 14, 2019
Total business inventories increased 0.5% (5.3% year-on-year) during April, after being unchanged in March (unrevised). Total business sales decreased 0.2% (+2.8% y/y) following a 1.3% gain (revised down from 1.6%). The inventory-to-sales (I/S) ratio ticked up to 1.39 from an upwardly-revised 1.38. Business inventory swings can have a meaningful impact on GDP. In the first quarter inventories added 0.6 percentage point to GDP growth.
Retail inventories increased 0.5% (4.6% y/y) in April after declining 0.3%. Auto inventories, which comprise roughly 35% of retail inventories, grew 0.8% (8.2% y/y). Non-auto retail inventories rose 0.4% (2.6% y/y). General merchandise inventories, the second largest sector were unchanged (+0.1% y/y). The troubled department store sector – a subset of general merchandise – saw inventories down 1.4% (-7.7% y/y). Factory sector inventories gained 0.3% (3.8% y/y). As reported last week, wholesale inventories were up 0.8% (7.6% y/y).
Retail sales increased an upwardly-revised 0.3% in April (was -0.2%) and 3.5% y/y, with non-auto sales growing 0.5% (3.6% y/y). Note: the advanced retail sales data for May was released today showing a 0.5% gain (3.1% y/y). Wholesale sector sales declined 0.4% in April (+2.7% y/y), while shipments from the factory sector were down 0.5% (+2.2% y/y).
The inventory-to-sales ratio in the retail sector was unchanged at 1.45. The non-auto I/S ratio ticked up down to 1.19, 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 edged up to 1.34 and 1.37 respectively.
The manufacturing and trade data are in Haver's USECON database.
Manufacturing & Trade | Apr | Mar | Feb | Y/Y | 2018 | 2017 | 2016 |
---|---|---|---|---|---|---|---|
Business Inventories (% chg) | 0.53 | 0.05 | 0.29 | 5.30 | 4.92 | 3.37 | 1.70 |
Retail | 0.53 | -0.26 | 0.16 | 4.61 | 4.22 | 2.36 | 4.10 |
Retail excl. Motor Vehicles | 0.39 | -0.05 | 0.38 | 2.60 | 1.25 | 2.16 | 1.95 |
Merchant Wholesalers | 0.82 | -0.02 | 0.41 | 7.63 | 7.14 | 3.26 | 1.90 |
Manufacturing | 0.26 | 0.41 | 0.31 | 3.78 | 3.52 | 4.46 | -0.71 |
Business Sales (% chg) | |||||||
Total | -0.23 | 1.27 | 0.11 | 2.77 | 6.09 | 5.57 | -0.80 |
Retail | 0.29 | 1.87 | -0.36 | 3.49 | 4.72 | 4.96 | 2.55 |
Retail excl. Motor Vehicles | 0.52 | 1.46 | -0.41 | 3.64 | 5.35 | 4.97 | 2.01 |
Merchant Wholesalers | -0.40 | 1.82 | 0.31 | 2.73 | 6.54 | 6.72 | -1.30 |
Manufacturing | -0.53 | 0.19 | 0.34 | 2.18 | 6.89 | 4.98 | -3.17 |
I/S Ratio | |||||||
Total | 1.39 | 1.38 | 1.39 | 1.36 | 1.36 | 1.38 | 1.42 |
Retail | 1.45 | 1.45 | 1.48 | 1.44 | 1.44 | 1.47 | 1.49 |
Retail excl. Motor Vehicles | 1.19 | 1.20 | 1.21 | 1.21 | 1.20 | 1.24 | 1.28 |
Merchant Wholesalers | 1.34 | 1.33 | 1.35 | 1.28 | 1.29 | 1.30 | 1.35 |
Manufacturing | 1.37 | 1.36 | 1.36 | 1.35 | 1.35 | 1.37 | 1.41 |