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Economy in Brief
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...
U.S. Chicago Business Barometer Falls Back in June to the Lowest Level since Aug. '20
The ISM-Chicago Purchasing Managers Business Barometer fell to 56.0...
U.S. Unemployment Claims Edged Down
Initial claims for unemployment insurance filed in the week ended June 25 declined by 2,000 to 231,000...
Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
by Sandy Batten June 16, 2020
Total business inventories fell 1.3% m/m (-2.2% y/y) in April, following a revised 0.3% m/m decline in March. The April decline was larger than the 0.8% decline expected by the Informa Global Markets panel. Business sales collapsed 14.4% m/m (-18.4% y/y) in April as the widespread lockdown severely restrained activity. This was by a factor of two the largest monthly decline in sales in the history of the series dating back to 1967. Sales had fallen 5.2% m/m in March as the lockdowns generally began in the second half of the month. Even with the decline in inventories, the huge drop in sales led the inventory/sales ratio to jump up to 1.67 in April, its highest reading since February 1983, from 1.45 in March.
Retail inventories led the overall decline in April, falling 3.7% m/m (-3.2% y/y) after a 1.1% m/m rise in March. The decline in retail inventories was widely spread across major categories with an 8.4% m/m drop in motor vehicle inventories the major contributor. Apart from motor vehicle inventories, other inventories fell a more modest 1.1% m/m (-0.9% y/y) in April. Wholesale inventories edged up 0.3% m/m in April, their first increase in eight months. Manufacturing inventories declined 0.4% m/m in April, their fourth consecutive monthly decline.
Sales plunged at all levels in April. Retail store sales dropped 12.7% m/m (-15.3% y/y). But April sales, also reported separately today, showed a 16.8% m/m rebound in May as some states began to reopen their economies. Wholesale sales collapsed 16.9% m/m in April while manufacturing sales fell 13.5% m/m. The April declines in all three sales categories were by far the largest monthly declines in the series histories.
With sales collapsing, inventory-to-sales ratios soared in April notwithstanding the general decline in inventories. The total I/S ratio shot up to 1.67 in April from 1.45 in March. The retail I/S ratio rose to 1.68 in April from 1.53 in March. The wholesale I/S ratio rose jumped up to 1.65 in April, its highest on record dating back to 1980. The manufacturing I/S ratio increased to 1.69 in April, its highest reading since 1991, from 1.46 in March.
The manufacturing and trade data are in Haver's USECON database and the Informa survey information is in MMSAMER.
Manufacturing & Trade | Apr | Mar | Feb | Apr Y/Y | 2019 | 2018 | 2017 |
---|---|---|---|---|---|---|---|
Business Inventories (% chg) | -1.3 | -0.3 | -0.4 | -2.2 | 1.9 | 4.9 | 3.2 |
Retail | -3.7 | 1.1 | -0.3 | -3.2 | 1.0 | 4.6 | 2.4 |
Retail excl. Motor Vehicles | -1.1 | -0.8 | 0.0 | -0.9 | 1.9 | 3.7 | 2.2 |
Merchant Wholesalers | 0.3 | -1.1 | -0.7 | -2.8 | 1.7 | 6.5 | 3.0 |
Manufacturing | -0.4 | -1.1 | -0.4 | -0.6 | 2.8 | 3.6 | 4.2 |
Business Sales (% chg) | |||||||
Total | -14.4 | -5.2 | -0.5 | -18.4 | 1.6 | 5.9 | 5.3 |
Retail | -12.7 | -5.1 | -0.5 | -15.3 | 3.4 | 4.2 | 4.6 |
Retail excl. Motor Vehicle | -12.8 | 1.0 | -0.5 | -10.2 | 3.3 | 5.1 | 4.9 |
Merchant Wholesalers | -16.9 | -5.1 | -0.7 | -20.7 | 0.6 | 6.8 | 6.6 |
Manufacturing | -13.5 | -5.5 | -0.4 | -18.9 | 1.0 | 6.6 | 4.7 |
I/S Ratio | |||||||
Total | 1.67 | 1.45 | 1.38 | 1.39 | 1.39 | 1.36 | 1.38 |
Retail | 1.68 | 1.53 | 1.43 | 1.47 | 1.46 | 1.46 | 1.48 |
Retail excl. Motor Vehicles | 1.35 | 1.19 | 1.21 | 1.22 | 1.22 | 1.22 | 1.24 |
Merchant Wholesalers | 1.65 | 1.37 | 1.31 | 1.34 | 1.34 | 1.28 | 1.30 |
Manufacturing | 1.69 | 1.46 | 1.40 | 1.38 | 1.38 | 1.35 | 1.38 |