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Economy in Brief

U.S. Business Inventories & Sales Firm During September
by Tom Moeller  November 17, 2020

• Business inventory accumulation strengthens.

• Sales growth also remains firm.

• Inventory-to-sales ratio remains at six-year low.

Total business inventories rose 0.7% (-4.7% y/y) during September following an unrevised 0.3% August gain. This is the third increase since the beginning of the year. Total business sales gained 0.6% (0.8% y/y) after increasing 0.9% in August, revised from 0.6%. The inventory-to-sales (I/S) ratio held steady at 1.32, the lowest level since October 2014.

Retail inventories increased 1.7% in September (-9.0% y/y) following a 0.5% rise. Auto inventories, which comprise roughly 30% of retail inventories, declined 3.1% (-22.4% y/y). Non-auto retail inventories gained 1.1% (-1.5% y/y). General merchandise inventories, the second largest retail sector, rose 1.1% (-4.0% y/y). In the department store sector, a subset of general merchandise, inventories increased 0.8% (-14.9% y/y). Wholesale inventories rose 0.4% (-3.9% y/y) while factory sector inventories held steady (-1.2% y/y) for the second straight month.

Retail sales increased 1.5% (8.8% y/y) as non-auto sales strengthened 1.1% (8.2% y/y). The advanced retail sales data for October was released today and indicated a 0.3% sales improvement (5.7% y/y). Wholesale sector sales edged 0.1% higher (-2.3% y/y) while factory shipments improved 0.3% (-3.3% y/y) for the second straight month.

The inventory-to-sales ratio in the retail sector held steady at the record low of 1.22 (data date back to 1967). The non-auto I/S ratio also remained at the record low of 1.11. The wholesale I/S ratio held steady at 1.31 and the factory sector ratio eased to 1.42.

The manufacturing and trade, industrial production and international trade data are in Haver's USECON database. Detailed industrial production data can be found in the IP database

Manufacturing & Trade Sep Aug Jul Sep Y/Y 2019 2018 2017
Business Inventories (% chg) 0.7 0.3 0.1 -4.7 1.9 4.9 3.2
  Retail 1.7 0.5 1.2 -9.0 1.0 4.6 2.4
    Retail excl. Motor Vehicles 1.1 0.5 0.6 -1.5 1.9 3.7 2.2
  Merchant Wholesalers 0.4 0.5 -0.2 -3.9 1.7 6.5 3.0
  Manufacturing 0.0 0.0 -0.6 -1.2 2.8 3.6 4.2
Business Sales (% chg)
Total 0.6 0.9 3.4 0.8 1.6 5.9 5.3
  Retail 1.5 1.1 0.8 8.8 3.3 4.2 4.6
    Retail excl. Motor Vehicle 1.1 1.1 1.2 8.2 3.3 5.1 4.9
  Merchant Wholesalers 0.1 1.2 4.8 -2.3 0.6 6.8 6.7
  Manufacturing 0.3 0.3 4.7 -3.3 1.0 6.6 4.7
I/S Ratio
Total 1.32 1.32 1.33 1.40 1.39 1.36 1.38
  Retail 1.22 1.22 1.23 1.45 1.46 1.46 1.48
    Retail excl. Motor Vehicles 1.11 1.11 1.11 1.22 1.22 1.22 1.24
  Merchant Wholesalers 1.31 1.31 1.32 1.33 1.34 1.28 1.30
  Manufacturing 1.42 1.43 1.43 1.39 1.38 1.35 1.38
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