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Economy in Brief

U.S. Business Inventories and Sales Rose in April
by Sandy Batten  June 15, 2022

• Inventories continued to build, but more slowly.

• Sales growth slowed.

• Inventory-to-sales ratio edged higher.

Total business inventories rose 1.2% m/m in April (+16.6% y/y) following a 2.4% monthly jump in March. A 1.2% gain had been expected in the Informa Global Markets Survey. Business sales rose 0.4% m/m (13.7% y/y) after a 1.6% monthly gain in March. The inventory-to-sales ratio edged up to 1.29 from 1.28 in March and 1.27 in February. The most recent low was 1.26, reached last November.

Wholesale inventories continued to lead the overall build. They were up 2.2% m/m (24.0% y/y) in April on top of a 2.7% jump in March and a 2.8% gain in February. Retail inventories rose a more modest 0.7% m/m (15.1% y/y) in April but this was on top of a strong 3.1% monthly rise in March. In the retail sector, motor vehicle inventories fell 2.2% m/m while clothing inventories jumped up 4.3% m/m and inventories of food and beverages increased 2.2% m/m. Factory inventories increased 0.6% m/m (10.7% y/y) in April, down from a 1.4% monthly gain in March.

The slowdown in total business sales in April was widely spread. Retail sales slowed to 0.5% m/m in April (6.2% y/y) from 1.0% in March. (In a separate report released this morning, retail sales deteriorated further in May, posting a 0.4% m/m decline.) Wholesale sales rose 0.7% m/m in April (20.9% y/y), down from 1.8% m/m in March while factory sales edged up just 0.2% m/m in April (14.0% y/y) after a 2.2% m/m gain in the prior month.

With inventory gains outpacing the rise in sales, the overall inventory-to-sales ratio edged higher to 1.29 in April from 1.28 in the previous month. The retail sector I/S ratio was unchanged at 1.18 while the wholesale I/S ratio rose to 1.25 from 1.23 and the factory I/S ratio edged up to 1.48 from 1.47.

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

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