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Economy in Brief

U.S. Wholesale Inventory Growth Strengthens in August
by Kathleen Stephansen, CBE  October 7, 2022

• Wholesale inventories posted a robust rise in August.

• Wholesale sales rose in August following a decline in July.

• Inventory-to-sales ratio continues upward trend.

Wholesale inventories rose 1.3% (25.0% y/y) in August following a rise of 0.6% (25.1% y/y) in July. The latest rise was unrevised from a 1.3% rise in the advance estimate issued last month. Monthly increases had exceeded 1.0% in most months since early last year. The Informa Global Markets Survey expected a rise of 1.1% in August.

Durable goods inventories rose 1.3% (26.5% y/y) in August following a 1.1% (26.8% y/y) gain in July. Motor vehicle & parts inventories rose 5.1% (31.1% y/y). Furniture & home furnishings inventories edged 0.2% higher (45.0% y/y) while professional equipment stockpiles rose 0.3% (19.4% y/y). Inventories of metals & minerals excluding petroleum declined 1.2% in August (+24.7% y/y). Electrical equipment inventories increased 2.3% (35.7% y/y), while machinery inventories gained 1.4% (20.0% y/y).

In the nondurable goods sector, inventories rose 1.2% (22.7% y/y) in August following a small decline of 0.1% in July (+22.6% y/y). Petroleum & petroleum product inventories rose 2.0% (19.6% y/y) while apparel inventories rose 2.1% (69.5% y/y). Chemical inventories rose 3.8% (29.1% y/y) and grocery product inventories rose 0.1% (22.0% y/y).

Wholesale sales rose 0.1% (16.1% y/y) in August after a decline of 1.5% (+15.2% y/y) in July. The Action Economics Forecast Survey expected a 0.4% rise. Durable goods sales rose a very slight 0.1% (11.0% y/y). Motor vehicle & parts sales rose 1.5% (10.0% y/y), and furniture & home furnishings sales rose 3.3% (17.6% y/y). Sales of machinery rose 0.6% (16.0% y/y) while electrical machinery sales in July declined 0.8% (+15.1% y/y).

Sales of nondurable goods rose a slight 0.2% (20.9% y/y) in August, following a decline of 3.0% (+19.5% y/y) during July. Petroleum sales declined 2.6% (+37.2% y/y). Apparel sales jumped 6.0% (13.0% y/y) while chemical sales declined 0.9% (+18.1% y/y). Grocery sales improved 0.8% (11.7% y/y) in August.

The inventory-to-sales (I/S) ratio rose to1.31 in August, up from to 1.29 in July. It was the highest ratio since November 2020. The durable goods I/S ratio edged higher to 1.71 in August from 1.69 in July and compared to a low of 1.48 in July 2021. The I/S ratio for nondurable goods edged higher to 0.96 from 0.95 in July, the highest level since June of last year.

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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