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Economy in Brief

U.S. Wholesale Inventories Continue to Rise in September
by Tom Moeller  November 9, 2022

• Increase moderates after August surge.

• Sales rebound modestly.

• Inventory-to-sales ratio holds steady.

Wholesale inventories rose 0.6% (24.1% y/y) during September following a 1.4% August increase, revised from 1.3%. The latest gain compared to a 0.9% rise in the advance report issued earlier. Monthly increases have slowed significantly since early this year. The Informa Global Markets Survey expected a 0.8% rise in September.

Durable goods inventories rose 0.8% (26.5% y/y) in September following a 1.5% gain in August. Motor vehicle & parts inventories rose 1.8% (36.8% y/y). Furniture & home furnishings inventories rose 0.6% (42.4% y/y) while professional equipment inventories rose 0.9% (18.5% y/y). Electrical equipment inventories increased 0.3% (33.0% y/y), while machinery inventories gained 2.2% (22.9% y/y). Inventories of metals & minerals excluding petroleum declined 1.0% in September (+19.0% y/y).

In the nondurable goods sector, inventories edged 0.1% higher (20.6% y/y) in September after strengthening 1.2% in August. Petroleum & petroleum product inventories fell 3.8% (+18.1% y/y) with lower prices. Chemical inventories fell 2.6% (+24.9% y/y). On the other hand, apparel inventories rose 3.4% (69.1% y/y). and grocery product inventories rose 1.7% (23.0% y/y).

Wholesale sales rose 0.4% (14.4% y/y) in September after little change in August. The Action Economics Forecast Survey expected a 0.5% rise. Durable goods sales rose 0.7% (10.9% y/y) after easing 0.1% in August. Motor vehicle & parts sales rose 5.9% (20.3% y/y). Sales of machinery rose 0.8% (14.9% y/y) while electrical machinery sales in September rose 1.6% (13.9% y/y). Professional equipment sales rose 1.7% (4.6% y/y), but furniture & home furnishings sales fell 1.4% (+10.7% y/y).

Sales of nondurable goods edged 0.1% higher (17.6% y/y) in September, the same as in August. A 0.6% decline (+30.9% y/y) in petroleum sales held back the total change. Apparel sales also weakened 2.0% (+6.4% y/y) and paper & product sales fell 0.6% (+14.2% y/y). In contrast, chemical sales rose 0.4% (18.9% y/y) and grocery sales improved 0.7% (10.9% y/y) in September.

The inventory-to-sales (I/S) ratio held steady at 1.31 in September and remained up from 1.29 in July. It was the highest ratio since November 2020. The durable goods I/S ratio remained at 1.72 in September and compared to a low of 1.48 in July 2021. The I/S ratio for nondurable goods also was steady at 0.96 and remained at 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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