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Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
by Sandy Batten November 16, 2021
• Inventories rose 0.7% m/m while sales gained 0.9% m/m.
• Sales increase strongest in past three months.
• Inventory-to-sales ratio unchanged.
Total business inventories increased 0.7% (7.5% y/y) during September following a 0.8% m/m rise in August. The September increase matched expectations in the Informa Global Markets Survey. Business sales also rose a solid 0.9% m/m (15.5% y/y) in September, up sharply from a meager 0.1% m/m in August. With inventories and sales rising at the similar paces, the inventory-to-sales ratio (I/S) held steady at 1.26 in September, just 0.01 above the lowest level since February 2012.
By sector, wholesale inventories led the increase in total inventories, rising 1.4% m/ (13.1% y/y) in September on top of a 1.3% m/m increase in August. Retail inventories slipped 0.2% m/m (+0.5% y/y) in September, their first monthly decline in four months. However, the September decline was more than accounted for by a 2.9% m/m plunge in motor vehicle inventories. Excluding this decline, the remainder of retail inventories posted a 0.7% m/m (10.1% y/y) increase, led by a 2.4% m/m increase in furniture, electronics and appliances inventories. Factory inventories posted a solid 0.8% m/m gain (8.2% y/y) in September.
Total business sales rose 0.9% m/m in September, their fourth consecutive monthly increase. The September gain was led by a 1.1% m/m (22.0% y/y) rise in wholesale sales. Retail sales posted a 0.9% m/m (12.5% y/y) increase in September, solid though down from the 1.3% m/m gain in August. (Note: in a separate release this morning, retail sales rose a larger-than-expected 1.7% m/m in October.) Factory shipments picked up to 0.6% m/m (11.7% y/y) in September from a subpar 0.1% m/m rise in August.
With overall sales and inventories rising at similar paces, the overall inventory/sales ratio was unchanged at 1.26 in September. The retail I/S ratio slipped slightly to 1.09 in September from 1.10 in August while both the wholesale I/S ratio (1.23) and the manufacturing I/S ratio (1.48) were unchanged. Retail inventories remain historically quite low with the retail I/S ratio just off its all-time low (dating back to January 1967) of 1.07 reached in April.
The manufacturing and trade data are in Haver's USECON database.
Manufacturing & Trade | Sep | Aug | Jul | Sep Y/Y | 2020 | 2019 | 2018 |
---|---|---|---|---|---|---|---|
Business Inventories (% chg) | 0.7 | 0.8 | 0.6 | 7.5 | -2.6 | 2.4 | 4.5 |
Retail | -0.2 | 0.2 | 0.4 | 0.5 | -5.6 | 0.6 | 4.4 |
Retail excl. Motor Vehicles | 0.7 | 0.7 | 0.5 | 10.1 | 0.8 | 1.7 | 3.4 |
Merchant Wholesalers | 1.4 | 1.3 | 0.6 | 13.1 | -1.7 | 1.4 | 6.2 |
Manufacturing | 0.8 | 0.7 | 0.6 | 8.2 | -0.5 | 5.3 | 2.8 |
Business Sales (% chg) | |||||||
Total | 0.9 | 0.1 | 0.5 | 15.5 | -3.0 | 0.0 | 5.7 |
Retail | 0.9 | 1.3 | -2.0 | 12.5 | 3.1 | 3.0 | 4.2 |
Retail excl. Motor Vehicle | 0.8 | 2.5 | -1.3 | 13.6 | 3.9 | 3.0 | 5.0 |
Merchant Wholesalers | 1.1 | -0.9 | 2.1 | 22.0 | -4.9 | -0.2 | 6.7 |
Manufacturing | 0.6 | 0.1 | 1.5 | 11.7 | -6.7 | -2.6 | 6.0 |
I/S Ratio | |||||||
Total | 1.26 | 1.26 | 1.25 | 1.35 | 1.43 | 1.42 | 1.36 |
Retail | 1.09 | 1.10 | 1.11 | 1.22 | 1.34 | 1.47 | 1.46 |
Retail excl. Motor Vehicles | 1.06 | 1.06 | 1.08 | 1.09 | 1.15 | 1.22 | 1.21 |
Merchant Wholesalers | 1.23 | 1.23 | 1.20 | 1.33 | 1.38 | 1.35 | 1.28 |
Manufacturing | 1.48 | 1.48 | 1.47 | 1.53 | 1.58 | 1.46 | 1.37 |