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Economy in Brief

U.S. Wholesale Inventories Post Strong Gain in March
by Tom Moeller  May 9, 2022

• Strong increases are registered broadly.

• Widespread sales gains also are registered.

• Inventory-to-sales ratio steadies.

Wholesale inventories during March increased 2.3% (22.0% y/y) compared to a 2.8% rise in the advance report issued on April 27. The gain followed a 2.8% February rise, revised from 2.3% reported earlier. Wholesale inventories account for roughly one-third of total business inventories. The Informa Global Markets Survey expected a 2.3% March gain.

Durable goods inventories increased 2.2% in March (23.2% y/y), the same as in February. Furniture & home furnishings inventories led the gain and jumped 4.5% (43.4% y/y). Electrical equipment inventories surged 4.2% (31.9% y/y) while motor vehicle & parts inventories increased 2.4% (14.0% y/y). Machinery inventories gained 1.7% (10.0% y/y) while professional equipment inventories increased 1.4% (16.0% y/y).

In the nondurable goods sector, inventories rose 2.6% (20.2% y/y) after strengthening 3.8% in February. Apparel inventories jumped 4.4% (28.5% y/y) while the value of chemicals inventories rose 2.9% (24.0% y/y). A 1.5% increase (21.1% y/y) in inventories of petroleum & petroleum products followed but paper & paper product inventories edged 0.4% lower (+7.8% y/y).

Wholesale sales increased 1.7% in March (22.1% y/y) after strengthening 1.5% in February. A 1.7% rise was anticipated in the Action Economics Forecast Survey. Durable goods sales improved 1.7% (18.1% y/y) after falling 1.0% in February. Purchases of motor vehicles strengthened 3.9% (6.8% y/y) while lumber sales increased 3.8% (32.3% y/y). Home furnishings purchases increased 2.3% (18.3% y/y) and metals sales rose 2.9% (43.3% y/y). Electrical equipment sales improved 0.5% (19.1% y/y) while machinery sales held steady (17.8% y/y).

Sales of nondurable goods gained 1.6% (25.9% y/y) in March following a 3.9% surge in February. Sales of petroleum products jumped 6.9% and by two-thirds y/y with higher prices. Apparel sales strengthened 4.7% (12.7% y/y) and chemical purchases improved 3.3% (26.6% y/y). Sales of paper product rose 1.7% (23.2% y/y) while grocery sales declined 1.3% (+16.8% y/y).

The inventory-to-sales ratio held steady in March at 1.22. The durable goods I/S ratio also remained unchanged at 1.57 and the nondurable I/S ratio edged up to 0.92.

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.

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