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Economy in Brief

U.S. Business Inventories & Sales Advance in February
by Tom Moeller  April 14, 2022

• Retail inventories continue to build.

• Wholesale inventory gain firms.

• Inventory-to-sales ratio edges higher from near-record low.

Total business inventories rose 1.5% during February (12.4% y/y) following a 1.3% January rise, revised from 1.1%. A 1.3% gain had been expected in the Informa Global Markets Survey. Business sales rose 1.0% (18.8% y/y) in February following a 4.1% January gain. The inventory-to-sales ratio edged higher to 1.26 after falling to 1.25 in January. These figures remained up slightly versus the record low of 1.24 reached last October

The 2.5% increase (19.9% y/y) in wholesale inventories, reported last month, led the rise in inventories overall. Retail inventories gained 1.2% (7.3% y/y) following a 2.0% January increase. The rise reflected a 0.9% increase (-10.3% y/y) in auto inventories which came after three straight months of strong gains. Furniture, electronics and appliance store inventories gained 4.6% (22.3% y/y) after two months of strong growth. General merchandise store inventories surged 2.0% (22.2% y/y) after rising 5.0% in January. Clothing store inventories rose 1.2% (13.7% y/y), the sixth consecutive month of strong increases. Factory inventories increased 0.6% (9.7% y/y) after rising 0.8% in January.

The rise in business sales was led by a 1.7% increase in wholesale sales as reported last Friday. Retail sales increased 0.5% in February (16.4% y/y) after a 5.8% January increase while nonauto retail sales increased 0.2% (16.0% y/y) after surging 5.5% in January. Manufacturing sales posted a 0.6% gain (13.7% y/y) in February following a 1.4% jump in the prior month.

The overall inventory-to-sales ratio edged higher due to modest increases in the retail and wholesale sectors to 1.13 and 1.21, respectively. The I/S ratio in the factory sector held steady at 1.45

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

Manufacturing & Trade Feb Jan Dec Feb Y/Y 2021 2020 2019
Business Inventories (% chg) 1.5 1.3 2.4 12.4 10.6 -2.6 2.4
  Retail 1.2 2.0 4.7 7.3 4.1 -5.7 0.6
    Retail excl. Motor Vehicles 1.4 1.8 3.9 14.9 13.2 0.7 1.7
  Merchant Wholesalers 2.5 1.2 2.5 19.9 18.1 -1.8 1.3
  Manufacturing 0.6 0.8 0.4 9.7 9.1 -0.5 5.3
Business Sales (% chg)
Total 1.0 4.1 -0.7 18.8 18.0 -2.9 -0.1
  Retail 0.5 5.8 -3.0 16.4 18.1 3.1 3.0
    Retail excl. Motor Vehicle 0.2 5.5 -3.4 16.0 16.6 3.9 3.0
  Merchant Wholesalers 1.7 5.0 0.1 25.5 22.7 -4.8 -0.4
  Manufacturing 0.6 1.4 0.7 13.7 12.7 -6.7 -2.6
I/S Ratio
Total 1.26 1.25 1.29 1.33 1.27 1.43 1.42
  Retail 1.13 1.13 1.17 1.23 1.12 1.34 1.47
    Retail excl. Motor Vehicles 1.11 1.09 1.13 1.12 1.07 1.15 1.22
  Merchant Wholesalers 1.21 1.20 1.25 1.27 1.23 1.38 1.35
  Manufacturing 1.45 1.45 1.46 1.50 1.48 1.58 1.46
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