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Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
by Tom Moeller January 10, 2021
• Durable goods lead inventory rise.
• Total sales firm for a third consecutive month.
• I/S ratio holds steady.
Wholesale inventories rose 1.4% (15.9% y/y) during November compared to a 1.2% gain in the advance report issued on December 29. October's inventory increase was revised to 2.5% from 2.3%. The Informa Global Markets Survey expected a 1.2% November gain.
Durable goods inventories increased 2.1% in November (17.0% y/y) after rising 2.5% during October. Furniture & home furnishings led the gain with a 4.5% rise (31.1% y/y). Motor vehicle & parts inventories rose a steady 2.7% (2.4% y/y). Metals & minerals inventories increased 2.5% (41.7% y/y). Electrical equipment inventories gained 1.8% (22.9%) while machinery inventories rose 1.2% (5.2% y/y). Professional & commercial equipment inventories increased 0.9% (16.6% y/y). In the nondurable sector, inventories edged 0.3% higher (14.4% y/y) after a 2.5% October increase. A 5.4% decline (+33.8% y/y) in inventories of petroleum & petroleum products held back the November increase. Apparel inventories gained 3.9% (12.1% y/y) and grocery inventories increased 2.6% (16.1% y/y). Paper & paper product inventories rose 1.5% (11.9% y/y) while chemicals inventories edged 0.1% higher (19.4%).
Wholesale sales rose 1.3% (23.3% y/y) during November after increasing 2.5% in October, revised from 2.2%. A 1.2% rise was anticipated in the Action Economics Forecast Survey.
Sales of nondurable goods rose 2.0% in November (32.4% y/y) following a 3.6% October rise. Sales of petroleum products rose 4.8% (115.9% y/y) with higher prices. Chemical purchases rose 3.3% (34.1% y/y) and apparel sales rose 2.0% (20.7% y/y). Grocery sales rose 1.4% (19.5% y/y) but sales of paper product sales declined 1.1% (+17.9% y/y). Durable goods sales improved 0.6% in November (14.1% y/y). Lumber sales strengthened 3.0% (24.3% y/y). Electrical equipment sales increased 2.1% (2.8% y/y) and sales of metals gained 1.5% (77.6% y/y). Machinery sales rose 1.6% (19.6% y/y) but purchases of motor vehicles gained just 0.4% (1.4%). Hardware product sales increased 0.9% (14.1% y/y) while furniture & home furnishings sales held steady (9.1% y/y).
The inventory-to-sales ratio held steady in November at 1.22 where it's been for three straight months. The durable goods I/S ratio surged to 1.58, up from a May low of 1.48. The nondurable I/S ratio eased to 0.92, the lowest point since November 2014.
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 (%) | Nov | Oct | Sep | Nov Y/Y | 2020 | 2019 | 2018 |
---|---|---|---|---|---|---|---|
Inventories | 1.4 | 2.5 | 1.4 | 15.9 | -1.7 | 1.4 | 6.2 |
Sales | 1.3 | 2.5 | 1.7 | 23.3 | -4.9 | -0.2 | 6.7 |
I/S Ratio | 1.22 | 1.22 | 1.22 | 1.30 (Nov. '20) | 1.38 | 1.35 | 1.28 |