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Economy in Brief

U.S. Wholesale Inventories Rise Strongly Along with Sales in September
by Tom Moeller  November 10, 2021

• Hefty gains in wholesale inventories continue.

• Sales recoup August decline.

• I/S ratio holds steady.

Wholesale inventories rose 1.4% during September (13.1% y/y) following a 1.3% August rise, revised from 1.2%. A 1.1% gain had been expected in the Informa Global Markets Survey.

Durable goods inventories increased 1.3% in September (12.8% y/y) for the second straight month. Electrical equipment inventories rose 3.6% (17.8% y/y) while metals inventories posted a strong 3.5% rise (29.9% y/y). Lumber inventories rose 1.5% (42.4% y/y) and computer equipment inventories increased 1.0% (23.6% y/y). Professional equipment inventories rose 2.1% (16.8%) but motor vehicle inventories dropped 1.8% (-3.7% y/y). Nondurable goods inventories rose 1.6% (13.5% y/y) after increasing 1.3% in August. Inventories of petroleum products fell 1.2% (+33.9% y/y) despite stronger prices. Chemicals inventories edged 0.2% higher (15.6%) but apparel inventories surged 4.2% (2.2% y/y). Grocery inventories rose 0.8% (13.6% y/y).

Wholesale sales rebounded 1.1% (22.0% y/y) in September following a 0.9% August decline, revised from -1.1%. A 0.6% rise was anticipated in the Action Economics Forecast Survey.

Durable goods sales eased 0.2% (+16.3% y/y) following a 0.7% August drop. Hardware product sales fell 0.9% (+6.8% y/y) while lumber sales eased 0.2% (+18.8% y/y). Electronic goods sales also slipped 0.2% (+10.9% y/y) but machinery sales gained 2.7% (19.4%). Motor vehicle sales fell 2.5% (+4.1% y/y). Sales of nondurable goods rose 2.2% (27.5% y/y) following a 1.1% decline. Sales of petroleum products rose 2.5% (90.6% y/y). Apparel sales were little changed (20.4% y/y) while chemical sales eased 0.3% (+31.4% y/y). Paper product sales rose 1.2% (14.8% y/y).

The inventory-to-sales ratio held steady at 1.23. The durable goods I/S ratio rose to 1.54 in September from 1.52 in August, while the nondurable I/S ratio eased to 0.95 from 0.96 in August.

The wholesale trade figures 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 (%) Sep Aug Jul Sep Y/Y 2020 2019 2018
Inventories 1.4 1.3 0.6 13.1 -1.7 1.4 6.2
Sales 1.1 -0.9 2.1 22.0 -4.9 -0.2 6.7
I/S Ratio 1.23 1.23 1.20 1.33 (Sep '20) 1.38 1.35 1.28
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