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Economy in Brief

U.S. Wholesale Inventories & Sales Rise Moderately
by Tom Moeller  September 11, 2019

Wholesale inventories increased 0.2% during July (7.1% y/y) after a 0.1% dip in June, revised from unchanged. The gain matched expectations in the Informa Global Markets Survey.

Durable goods inventories eased 0.2% (+8.7% y/y) in July after a 0.1% uptick. Machinery inventories, the largest sector, fell 0.2% (10.6% y/y), while vehicle inventories, the second largest group, rose 0.5% (+19.5% y/y). Electrical equipment inventories declined 1.5% (2.7% y/y). Inventories of nondurable goods rose 0.8% (4.4% y/y) after a 0.4% decline. Drug inventories, which make up a quarter of nondurable inventories, rebounded 1.6% (3.7% y/y) after June's sharp decline. Apparel inventories declined 0.3% (+11.8% y/y), off for the fourth straight month. Inventories of chemicals declined 1.6% (-0.3% y/y) and the value of petroleum inventories rose 2.5% (0.6% y/y).

Wholesale sales improved 0.3% July (0.0% y/y) following three straight months of decline. The Action Economics Forecast Survey expected a 0.1% uptick.

Durable goods sales declined 0.7% (-2.7% y/y) after falling 0.2% in June. Electrical equipment sales, the largest sector, fell 1.1% (-7.0% y/y), down sharply for four straight months. Professional and commercial equipment shipments, which includes computers, rose 0.2 % (10.3% y/y). Motor vehicle sales improved 0.3% (5.3% y/y). Nondurable product sales increased 1.2% (3.4% y/y) after two months of decline. Drug sales, which are nearly the largest category of nondurable sales, gained 0.7% (9.2% y/y) while apparel sales declined 1.1% (-0.1% y/y), off for three consecutive months. Chemical shipments fell 2.0% (+0.2% y/y) but grocery product sales rose 1.2% (7.7% y/y). Petroleum product deliveries eased 0.1% (7.0% y/y), the fourth straight monthly decline.

The inventory-to-sales (I/S) ratio at the wholesale level held steady at a heightened 1.36 for the third consecutive month.

The durable goods I/S ratio increased to 1.77, the highest level since 2009. The machinery ratio rose to 2.78, while motor vehicles edged up to 1.78, nearly a ten-year high. The I/S ratio for nondurable goods was unchanged at 0.99. The paper industry I/S ratio held at a record 1.23. The drug industry I/S ratio remained low at 1.06 while the chemical industry ratio was steady at 1.14. The petroleum industry I/S ratio gained to 0.38.

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 (%) July June May July Y/Y 2018 2017 2016
Inventories 0.2 -0.1 0.4 7.1 7.1 3.3 1.9
Sales 0.3 -0.3 -0.6 0.0 6.8 6.3 -1.2
I/S Ratio 1.36 1.36 1.36 1.27 (July '18) 1.29 1.30 1.35
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