Global| Jul 16 2018U.S. Business Inventories Rise Moderately; Sales Strengthen
by:Tom Moeller
|in:Economy in Brief
Summary
Total business inventories increased 0.4% (4.4% y/y) during May following a 0.3% April increase. Total business sales strengthened 1.4% (8.6% y/y), following a 0.6% gain. The inventory-to-sales ratio slipped to 1.34. It peaked early [...]
Total business inventories increased 0.4% (4.4% y/y) during May following a 0.3% April increase. Total business sales strengthened 1.4% (8.6% y/y), following a 0.6% gain. The inventory-to-sales ratio slipped to 1.34. It peaked early in 2016 at 1.43.
Retail inventories increased 0.4% (2.2% y/y) in May, the same as during April. Auto inventories grew 0.9% (1.9% y/y) after a 0.8% rise. Non-auto retail inventories edged 0.1% higher (2.4% y/y) following a 0.2% increase. General merchandise inventories rose 0.3% (0.9% y/y) after a 1.0% surge. In the department store sector, inventories edged 0.2% higher (-3.2% y/y) following a 0.7% rise. Building materials inventories gained 0.7% (6.1% y/y) after a 0.6% increase, while clothing store inventories fell 0.7% (-0.8% y/y), down for the third straight month. Inventories of furniture, electronics and appliances declined 0.9% (-0.7% y/y), the fourth decline this year. As reported last week, wholesale inventories increased 0.6% (5.9% y/y) following a 0.1% uptick. Factory sector inventories rose 0.2% (5.2% y/y) following a 0.4% gain.
Retail sales increased 1.1% in May (6.5% y/y) with non-auto sales up 1.2% (7.1% y/y) after a 0.5% rise. Wholesale sector sales increased 2.5% (11.8% y/y) after improving 1.4%. Shipments from the factory sector rose 0.6% (7.3% y/y) following a 0.1% uptick.
The inventory-to-sales (I/S) ratio in the retail sector slipped to 1.43 in May, down sharply from the levels averaged during the prior two years. The non-auto I/S ratio declined to 1.20, its lowest level since early-2012. The ratio peaked at 1.29 early in 2016. The wholesale sector I/S ratio fell sharply to 1.24, its lowest level since November 2014. The manufacturing sector I/S ratio held steady for the third month at 1.35, its lowest point in three years.
The manufacturing and trade data are in Haver's USECON database.
| Manufacturing & Trade | May | Apr | Mar | May Y/Y | 2017 | 2016 | 2015 |
|---|---|---|---|---|---|---|---|
| Business Inventories (% chg) | 0.4 | 0.3 | -0.1 | 4.4 | 3.5 | 1.8 | 1.7 |
| Retail | 0.4 | 0.4 | -0.7 | 2.2 | 2.4 | 4.1 | 4.9 |
| Retail excl. Motor Vehicles | 0.1 | 0.2 | -0.6 | 2.4 | 2.3 | 1.9 | 3.9 |
| Merchant Wholesalers | 0.6 | 0.1 | 0.2 | 5.9 | 3.6 | 2.2 | 1.2 |
| Manufacturing | 0.2 | 0.4 | 0.2 | 5.2 | 4.5 | -0.7 | -0.8 |
| Business Sales (% chg) | |||||||
| Total | 1.4 | 0.6 | 0.6 | 8.6 | 5.8 | -0.8 | -3.4 |
| Retail | 1.1 | 0.4 | 0.7 | 6.5 | 4.9 | 2.5 | 1.9 |
| Retail excl. Motor Vehicles | 1.2 | 0.5 | 0.3 | 7.1 | 4.9 | 2.0 | 0.4 |
| Merchant Wholesalers | 2.5 | 1.4 | 0.4 | 11.8 | 7.4 | -1.3 | -4.9 |
| Manufacturing | 0.6 | 0.1 | 0.7 | 7.3 | 5.0 | -3.2 | -6.2 |
| I/S Ratio | |||||||
| Total | 1.34 | 1.35 | 1.35 | 1.39 | 1.38 | 1.42 | 1.39 |
| Retail | 1.43 | 1.44 | 1.44 | 1.49 | 1.47 | 1.49 | 1.46 |
| Retail excl. Motor Vehicles | 1.20 | 1.21 | 1.21 | 1.25 | 1.24 | 1.28 | 1.27 |
| Merchant Wholesalers | 1.24 | 1.27 | 1.29 | 1.31 | 1.29 | 1.35 | 1.33 |
| Manufacturing | 1.35 | 1.35 | 1.35 | 1.37 | 1.37 | 1.41 | 1.39 |
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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