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Economy in Brief
UK Consumer Sentiment Hits Lowest Reading since 1996
(when the GFK survey began; also lowest reading 'ever')
Of these 13 readings eight of them declined on the month in May three of them improved and two of them were unchanged...
U.S. Existing Home Sales Continue to Fall in April as Houses Become Less Affordable
The combination of soaring home prices across the nation and rising interest rates is making homes less affordable...
U.S. Index of Leading Indicators Fell in April
Five of the index's components fell in April, one was unchanged and four increased...
U.S. Unemployment Claims Rose in the Latest Week
The state insured rates of unemployment in regular programs vary widely...
CBI Gauge in the UK Continues to Be Upbeat
The global economy has a lot of challenges...
Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
Profits and Margins Plunge In Q1: Expect More Margin Contraction As Fed Squeezes Inflation
The Many Links of Inflation Cycle: Hard Landing Is Needed to Crack Them
Peak Inflation and Fed Policy: A Relationship which Should Worry the Fed and Scare Investors
Why Have the Yields on TIPS Been Negative in the Past Two Years?
by Gerald D. Cohen January 10, 2020
Wholesale inventories edged down 0.1% in November (3.3% year-over-year), following an unrevised 0.1% gain in October. The Informa Global Markets Survey anticipated a 0.1% rise in November. Wholesale inventory swings can have a meaningful impact on GDP. In the second quarter inventories provided a 0.9 percentage point drag on GDP growth, while in the third quarter they had little impact.
Durable goods inventories decreased 0.3% (+3.4% y/y) in November after a 0.4% decline in October. Machinery inventories, the largest sector, were down 0.3% (6.2% y/y), while vehicles, the second largest, fell 1.1% (+4.9% y/y). Electrical equipment edged up 0.1% (3.0% y/y). Inventories of nondurable goods gained 0.3% (3.1% y/y) after rising 0.9% in October. Drug inventories, which make up a quarter of nondurable inventories, gained 1.1% (5.7% y/y). Groceries, the second largest category, were up 0.9% (4.3% y/y).
Wholesale sales rebounded 1.5% during November (0.8% y/y) more than making up for the 1% decline in the previous two months. The Action Economics Forecast Survey looked for a 0.4% gain in November.
Durable goods sales rose 0.9% (-1.1% y/y) after a 1.2% decrease. Electrical equipment, the largest sector, grew 1.0% (-2.9% y/y). Professional and commercial equipment, which includes computers, declined 1.1% (-0.7% y/y). Wholesale vehicle sales jumped 4.5% (3.0% y/y) after falling 5.0% in the prior two months. Nondurable product sales rose 2.0% (2.6% y/y) after a 0.6% loss. Petroleum products jumped 6.6% (3.2% y/y), likely the result of higher oil prices. Drug sales, which vie with petroleum to be the largest category of nondurable sales, were up 0.3% (4.5% y/y) while groceries gained 0.5% (4.6% y/y).
The inventory-to-sales (I/S) ratio at the wholesale level declined to 1.35 in November from 1.37. The I/S ratio has been range-bound during 2019 after rising during the second half of last year. The durable goods I/S ratio decreased to 1.76. Last month's reading of 1.78 was the highest since the end of the Great Recession. The motor vehicles ratio fell to 1.73 from last month's ten year high of 1.83. The I/S ratio for nondurable goods decreased to 0.97.
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 (%) | Nov | Oct | Sep | Nov Y/Y | 2018 | 2017 | 2016 |
---|---|---|---|---|---|---|---|
Inventories | -0.1 | 0.1 | -0.7 | 3.3 | 7.1 | 3.3 | 1.9 |
Sales | 1.5 | -0.9 | -0.1 | 0.8 | 6.7 | 6.7 | -1.3 |
I/S Ratio | 1.35 | 1.37 | 1.36 | 1.32 (Nov '18) | 1.29 | 1.30 | 1.35 |