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Economy in Brief

U.S. Business Inventories Hold Steady as Sales Rise
by Tom Moeller  October 16, 2019

Total business inventories were unchanged during August (4.2% y/y) following a 0.3% July gain, revised from 0.4%. Total business sales rose 0.2% (1.1% y/y), the same as in July which was revised from 0.3%. The inventory-to-sales (I/S) ratio held steady at 1.40 for the fourth straight month.

Retail inventories eased 0.1% (+3.6% y/y) in August after a 0.7% jump. Auto inventories slipped 0.1% (+5.6% y/y) while nonauto inventories fell 0.2% (+2.5% y/y). Inventories of furniture & home furnishings eased 0.1% (-0.8% y/y), down for the fifth month in the last six. Clothing inventories fell 0.2% (+0.6% y/y) after a 0.3% rise. General merchandise store inventories fell 0.4% (-0.8% y/y) after a 0.8% increase while department store inventories declined for the seventh month this year (-7.6% y/y). Wholesale inventories rose 0.2% (6.2% y/y) in August for a second straight month. Factory sector inventories were little-changed (+2.9% y/y) after two minimal increases.

Retail sales increased 0.6% (4.6% y/y) in August after a 0.8% rise. Sales excluding autos improved 0.3% (3.9% y/y). Wholesale sector sales were unchanged (-0.7% y/y) after a 0.2% rise, while shipments from the factory sector eased 0.1% (-0.3% y/y).

The inventory-to-sales ratio in the retail sector slipped to 1.44 and has been falling since early this year. The non-auto retail I/S ratio held steady at 1.18 and matched its all-time low reached in November 2018. The wholesale I/S ratio was unchanged at 1.36 in August while the manufacturing I/S ratio held at 1.38.

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

Manufacturing & Trade Aug July June Aug Y/Y 2018 2017 2016
Business Inventories (% chg) 0.0 0.3 -0.0 4.2 4.9 3.4 1.7
  Retail -0.1 0.7 -0.2 3.6 4.2 2.4 4.0
    Retail excl. Motor Vehicles -0.2 0.3 -0.1 2.5 1.7 2.0 2.0
  Merchant Wholesalers 0.2 0.2 -0.1 6.2 7.1 3.3 1.9
  Manufacturing -0.0 0.1 0.1 2.9 3.5 4.5 -0.7
Business Sales (% chg)
Total 0.2 0.2 0.0 1.1 6.1 5.4 -0.8
  Retail 0.6 0.8 0.3 4.6 4.6 4.5 2.4
    Retail excl. Motor Vehicles 0.3 0.9 0.2 3.9 5.3 4.8 1.9
  Merchant Wholesalers 0.0 0.2 -0.3 -0.7 6.5 6.7 -1.3
  Manufacturing -0.1 -0.3 0.1 -0.3 6.9 5.0 -3.2
I/S Ratio
Total 1.40 1.40 1.40 1.35 1.36 1.38 1.42
  Retail 1.44 1.45 1.45 1.45 1.45 1.47 1.49
    Retail excl. Motor Vehicles 1.18 1.18 1.19 1.20 1.20 1.24 1.28
  Merchant Wholesalers 1.36 1.36 1.36 1.28 1.29 1.30 1.35
  Manufacturing 1.38 1.38 1.38 1.34 1.35 1.37 1.41
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