Recent Updates
- US: Consumer Sentiment (Feb-final), Chicago PMI (Feb),Personal Income, Adv Trade & Inventories (Jan)
- US: Consumer Sentiment Detail (Feb-final)
- Canada: Industrial Product Prices (Jan)
- UK: Motor Vehicle Production (Jan)
- more updates...
Economy in Brief
Chicago Business Barometer Declines Sharply in February
The ISM-Chicago Purchasing Managers Business Barometer fell 4.3 points in February to 59.5...
Goods Trade Deficit Widened Slightly in January
The advance estimate of the U.S. trade deficit in goods widened slightly to $83.74 billion in January..
Japan's Industrial Sector Mounts a Comeback
Japan's IP surged in January gaining 4.3% compared to December...
Aircraft Orders Boost U.S. Durable Goods Orders in January
Manufacturers' orders for durable goods increased a much larger-than-expected 3.4% m/m (4.5% y/y) in January...
Kansas City Fed Manufacturing Index Increases Again in February
The Kansas City Fed reported that its manufacturing sector business activity index rose to 24 in February...
Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
by Gerald D. Cohen February 10, 2021
• Inventories increased 0.3%, while sales jumped 1.2% in December.
• Wholesale inventory-to-sales ratio declined to 1.29.
Wholesale inventories grew 0.3% in December (-1.6% year-over-year). Wholesale inventory swings can have a meaningful impact on GDP. In the fourth quarter, inventory rebuild added 1.04 percentage points (ppt) to the overall 4.0% annualized increase in GDP.
Durable goods inventories edged up 0.1% in December (-3.9% y/y) with declines in machinery and automotive, the two largest categories, offset by gains in electrical and professional & commercial equipment, the ones ranked third and fourth. Nondurables rose 0.6% (1.9% y/y). Drug inventories, which make up over a quarter of nondurables, grew 2.2% (12.0% y/y). Groceries, the second largest category, fell 2.0% (-0.6% y/y).
Wholesale sales jumped up a greater-than-expected 1.2% during December (1.7% y/y). The Action Economics Forecast Survey anticipated a 0.6% rise. Durable goods sales rose 0.4% (4.9% y/y) as autos accelerated 2.6% (10.4% y/y). Nondurable wholesales gained 2.1% (-1.1%) as petroleum products jumped 12.7% (-22.2% y/y), likely the result of a 12.4% surge in seasonally adjusted oil prices (-21.3% y/y).
The inventory-to-sales (I/S) ratio at the wholesale level declined to 1.29 in December from 1.31. After hitting a record 1.63 in April – data goes back to 1980 – it is now below pre-COVID-19 levels and at a two-year low. The durable goods ratio, which has been hovering around two-year lows, was unchanged at 1.58. Meanwhile, the nondurable I/S ratio ticked down to 1.03, meaningfully lower than April's 1.22 record, though still elevated relative to the pre-COVID period. The durable and nondurable series go back to 1992.
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 (%) | Dec | Nov | Oct | Dec Y/Y | 2020 | 2019 | 2018 |
---|---|---|---|---|---|---|---|
Inventories | 0.3 | 0.0 | 1.3 | -1.6 | -1.6 | 1.4 | 6.5 |
Sales | 1.2 | 0.3 | 1.7 | 1.7 | -4.3 | 0.5 | 6.8 |
I/S Ratio | 1.29 | 1.31 | 1.31 | 1.34 (Dec '19) | 1.37 | 1.34 | 1.28 |