Global| May 14 2021U.S. Business Inventories Rise as Expected in March
by:Tom Moeller
|in:Economy in Brief
Summary
• Size of inventory gain is reduced from earlier two months. • Business sales surge. • Inventory-to-sales ratio declines sharply. Total business inventories rose 0.3% (-0.0% y/y) during March following a 0.6% February rise, revised [...]
• Size of inventory gain is reduced from earlier two months.
• Business sales surge.
• Inventory-to-sales ratio declines sharply.
Total business inventories rose 0.3% (-0.0% y/y) during March following a 0.6% February rise, revised from 0.5%. Inventories also rose 0.6% in January. Total business sales jumped 5.7% (18.5% y/y) after falling 1.6% in February, revised from -1.9%. Sales surged 4.5% in January.
Retail inventories declined 1.4% (-7.4% y/y) in March following a 0.1% uptick. This decline was due to a 6.1% drop (-27.3% y/y) in motor vehicle inventories, which account for about 30% of total inventories. Excluding motor vehicles, retail inventories rose 0.6% (4.0% y/y). Furniture inventories gained 0.8% (1.3% y/y) and inventories of building materials and garden supplies increased 0.7% (13.1% y/y). Clothing inventories fell 0.5% (-12.9% y/y) while general merchandise inventories also declined 0.5% (+4.1% y/y). Wholesale inventories increased 1.3% (4.5% y/y) in March while factory inventories rose 0.8% (3.0% y/y) for a second straight month.
After weather-related February declines, March sales bounced back in all sectors. Retail sales surged 10.4% (28.2% y/y) after falling 3.0% in February. Nonauto sales strengthened 8.4%. April retail sales were released earlier today. Wholesale sales strengthened 4.6% (19.0 y/y) while factory shipments rose 2.0% (9.5% y/y).
As sales grew faster than inventories, the inventory-to-sales (I/S) ratio fell to a record low of 1.23. (The data date back to December 1980.) The I/S ratio in all three sectors declined. In retail, it fell to a record low of 1.10. Nonauto retail declined to 1.04. The wholesale I/S ratio fell to 1.22 and the factory ratio dropped to 1.49.
The manufacturing and trade data are in Haver's USECON database.
| Manufacturing & Trade | Mar | Feb | Jan | Mar Y/Y | 2020 | 2019 | 2018 |
|---|---|---|---|---|---|---|---|
| Business Inventories (% chg) | 0.3 | 0.6 | 0.6 | -0.0 | -2.6 | 1.6 | 4.8 |
| Retail | -1.4 | 0.1 | 0.2 | -7.4 | -5.6 | 0.6 | 4.4 |
| Retail excl. Motor Vehicles | 0.6 | 1.4 | 0.3 | 4.0 | 0.8 | 1.7 | 3.4 |
| Merchant Wholesalers | 1.3 | 1.0 | 1.4 | 4.5 | -1.7 | 1.4 | 6.2 |
| Manufacturing | 0.8 | 0.8 | 0.1 | 3.0 | -0.5 | 5.3 | 2.8 |
| Business Sales (% chg) | |||||||
| Total | 5.7 | -1.6 | 4.5 | 18.5 | -2.6 | 1.2 | 5.9 |
| Retail | 10.4 | -3.0 | 7.3 | 28.2 | 3.1 | 3.0 | 4.2 |
| Retail excl. Motor Vehicle | 8.4 | -2.8 | 8.0 | 18.3 | 4.0 | 3.0 | 5.0 |
| Merchant Wholesalers | 4.6 | -0.0 | 4.4 | 19.0 | -4.6 | -0.2 | 6.7 |
| Manufacturing | 2.0 | -1.8 | 2.0 | 9.5 | -6.7 | -2.6 | 6.0 |
| I/S Ratio | |||||||
| Total | 1.23 | 1.30 | 1.27 | 1.46 | 1.39 | 1.40 | 1.36 |
| Retail | 1.10 | 1.23 | 1.19 | 1.52 | 1.34 | 1.47 | 1.46 |
| Retail excl. Motor Vehicles | 1.04 | 1.12 | 1.07 | 1.18 | 1.15 | 1.22 | 1.21 |
| Merchant Wholesalers | 1.22 | 1.26 | 1.25 | 1.39 | 1.38 | 1.35 | 1.28 |
| Manufacturing | 1.49 | 1.50 | 1.47 | 1.40 | 1.58 | 1.46 | 1.37 |
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.
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