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Economy in Brief

U.S. Business Inventories Stay Strong & Steady in November
by Tom Moeller  January 14, 2022

• Broad-based inventory growth led by retail.

• Sales increase moderates across sectors.

• Inventory-to-sales ratio edges higher.

Total business inventories increased 1.3% (8.7% y/y) during November as they did in October, revised from 1.2%. A 1.0% gain had been expected in the Informa Global Markets Survey. Business sales rose 0.7% (17.6% y/y) in November following a 2.2% October gain. The inventory-to-sales ratio edged higher to 1.25 in November but remained near its ten-year low.

Retail inventories surged 2.0% (0.6% y/y) after a 0.3% October rise. Retail inventories excluding motor vehicles rose 1.3% (10.7% y/y) in November after rising 0.7% in October. Motor vehicle inventories surged 4.2% (-21.3% y/y) following three months of significant decline. Apparel inventories strengthened 1.7% (5.2% y/y) after two months of similar increase. General merchandise store inventories rose 0.8% (11.1% y/y) following a 1.1% increase. Home furnishings & appliance inventories declined 0.4% (+17.5% y/y), off for the second straight month. Wholesale sector inventories surged 1.4% (15.9% y/y) following a 2.5% October jump. Factory inventories increased 0.7% (9.0% y/y) in November after a 0.9% October rise.

Retail sales edged 0.1% higher (16.2% y/y) in November following a 2.0% October surge. Sales excluding motor vehicles also improved just  0.1% (16.2% y/y). Wholesale sales surged 1.3% (23.2% y/y), the third month of strong increase. Factory shipments increased 0.7% (13.0% y/y) following a 2.0% gain in October.

With the inventory rise outpacing sales, the overall inventory-to-sales ratio rose slightly to 1.25 in November. The retail I/S ratio rose to 1.09 and retraced its October decline. The wholesale I/S ratio was unchanged at 1.22 and the manufacturing I/S ratio remained steady as well at 1.46, its lowest since June 2019.

The manufacturing and trade data are in Haver's USECON database.

Manufacturing & Trade Nov Oct Sep Nov Y/Y 2020 2019 2018
Business Inventories (% chg) 1.3 1.3 0.8 8.7 -2.6 2.4 4.5
  Retail 2.0 0.3 -0.1 0.6 -5.6 0.6 4.4
    Retail excl. Motor Vehicles 1.3 0.7 0.8 10.7 0.8 1.7 3.4
  Merchant Wholesalers 1.4 2.5 1.4 15.9 -1.7 1.4 6.2
  Manufacturing 0.7 0.9 1.0 9.0 -0.5 5.3 2.8
Business Sales (% chg)
Total 0.7 2.2 1.2 17.6 -3.0 0.0 5.7
  Retail 0.1 2.0 0.7 16.2 3.1 3.0 4.2
    Retail excl. Motor Vehicle 0.1 2.1 0.6 16.8 3.9 3.0 5.0
  Merchant Wholesalers 1.3 2.5 1.7 23.3 -4.9 -0.2 6.7
  Manufacturing 0.7 2.0 1.0 13.0 -6.7 -2.6 6.0
I/S Ratio
Total 1.25 1.24 1.26 1.35 1.43 1.42 1.36
  Retail 1.09 1.07 1.09 1.26 1.34 1.47 1.46
    Retail excl. Motor Vehicles 1.06 1.05 1.06 1.12 1.15 1.22 1.21
  Merchant Wholesalers 1.22 1.22 1.22 1.30 1.38 1.35 1.28
  Manufacturing 1.46 1.46 1.48 1.51 1.58 1.46 1.37
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