Global| Dec 13 2005U.S. Business Inventories Rise but Slowly
by:Tom Moeller
|in:Economy in Brief
Summary
Total business inventories rose 0.3% in October following an unrevised 0.5% gain the prior month. Despite these increases, the ratio of inventories-to-sales held at the record low of 1.25 as business sales increased 0.8% (7.6% y/y). [...]
Total business inventories rose 0.3% in October following an unrevised 0.5% gain the prior month. Despite these increases, the ratio of inventories-to-sales held at the record low of 1.25 as business sales increased 0.8% (7.6% y/y).
Business' hesitancy to build inventory is evident from several aspects of the latest release. While the annual growth in business sales has slowed to 7.6% from 9.7% during all of 2004, the growth in inventories has nearly halved to 4.1% from 7.7% last year. And the following detail underscore that hesitancy.
Retail inventories rose just 0.1% and even that small addition was due to a 0.7% rise in motor vehicle inventories which followed large additions during the prior two months. Excluding autos, inventories fell 0.1% and the September increase was revised sharply lower. Clothing inventories managed a 0.3% (5.7% y/y) but general merchandise fell 0.1% (+6.2% y/y). Inventories of furniture fell by 0.3% (+5.8% y/y) for the fourth consecutive down month.
Wholesale inventories rose just 0.2%. During the last ten years there has been a 66% correlation between the y/y change in wholesale inventories and the change in imports of nonpetroleum goods.
Factory sector inventories jumped 0.6% led by a 3.7% surge at petroleum refineries.
| Business Inventories | Oct | Sept | Y/Y | 2004 | 2003 | 2002 |
|---|---|---|---|---|---|---|
| Total | 0.3% | 0.5% | 4.1% | 7.7% | 1.4% | 1.6% |
| Retail | 0.1% | 0.8% | 1.7% | 5.7% | 3.9% | 5.9% |
| Retail excl. Autos | -0.1% | 0.1% | 5.1% | 5.9% | 2.0% | 2.3% |
| Wholesale | 0.2% | 0.6% | 6.6% | 10.8% | 2.0% | 1.2% |
| Manufacturing | 0.6% | 0.1% | 4.7% | 7.7% | -1.1% | -5.4% |
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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