• 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.