Global| Sep 14 2010Business Inventory Gain Is Strong
by:Tom Moeller
|in:Economy in Brief
Summary
Inventory management continues to turn towards accumulation. Total business inventories rose 1.0% during July following an upwardly revised 0.5% gain during June, changed from 0.3%. A 0.6% gain had been expected. As mentioned by [...]
Inventory management continues to turn towards accumulation. Total business inventories rose 1.0% during July following an upwardly revised 0.5% gain during June, changed from 0.3%. A 0.6% gain had been expected. As mentioned by Haver's Carol Stone last month, recent increases are hardly strong. But that may suggest that more is on the way as long as sales growth remains positive. So far, inventory accumulation has raised the inventory/sales ratio to 1.26 in July, unchanged m/m. Further efforts should come to raise the ratio from the recent all-time low of 1.23.
Recent strong gains in business inventories have been sporadic amongst the factory, wholesale and retail sectors. In each sector, gains amount to roughly 2.5% y/y following near-ten percent declines in 2009. Retail trade gains continue to be paced by motor vehicles where the 2.5% July increase (7.2% y/y) was the third consecutive strong month, Excluding motor vehicles, inventories were unchanged in July and up just 0.5% y/y. For non-auto retail, the inventory-to-sales ratio is up slightly from its low although there's been more of a gain in the furniture area.
The business sales and inventory data are available in Haver's USECON database.
| Business Inventories (%) | July | June | May | July Y/Y | 2009 | 2008 | 2007 |
|---|---|---|---|---|---|---|---|
| Total | 1.0 | 0.5 | 0.2 | 2.4 | -9.8 | 0.8 | 4.0 |
| Retail | 0.7 | 1.1 | 0.5 | 2.3 | -10.4 | -3.3 | 2.5 |
| Retail ex Motor Vehicles | 0.0 | 0.1 | 0.3 | 0.5 | -4.9 | -1.9 | 2.7 |
| Wholesale | 1.3 | 0.3 | 0.5 | 2.5 | -10.5 | 3.7 | 6.4 |
| Manufacturing | 1.0 | 0.1 | -0.4 | 2.5 | -8.8 | -0.8 | 7.6 |
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
More Economy in Brief
