Global| Apr 14 2005U.S. Business Inventories Still Building
by:Tom Moeller
|in:Economy in Brief
Summary
Total business inventories rose another 0.5% in February but figures back to 2002 were revised somewhat lower. Nevertheless, the y/y rate of inventory accumulation continued strong at 8.2% yet still lagged the improvement in sales [...]
Total business inventories rose another 0.5% in February but figures back to 2002 were revised somewhat lower. Nevertheless, the y/y rate of inventory accumulation continued strong at 8.2% yet still lagged the improvement in sales growth. In February the ratio of inventories-to-sales rose slightly from the record low but remained below the year ago level.
Retail inventories rose 0.3% in February for the second month. Excluding autos, retail inventories moderated to the weakest gain in four months. Inventories of furniture & electronics (+7.1% y/y) fell for the second month and general merchandise inventories rose just 0.1% (5.9% y/y). Apparel inventories accumulated strongly (4.0% y/y) for the second month.
Factory sector inventories grew 0.5% following the 1.5% jump in January. Regardless, the 8.6% gain versus last year was the strongest since 1989.
Wholesale inventory accumulation moderated to a 0.6% gain but the double digit rise versus last year was the strongest since 1995. During the last ten years there has been a 64% correlation between the y/y change in wholesale inventories and the change in imports of merchandise.
Overall business sales fell 0.4% (+9.6% y/y) due to lower wholesale sales and a 0.9% decline in factory shipments.
| Business Inventories | Feb | Jan | Y/Y | 2004 | 2003 | 2002 |
|---|---|---|---|---|---|---|
| Total | 0.5% | 0.9% | 8.2% | 7.7% | 1.4% | 1.6% |
| Retail | 0.3% | 0.3% | 5.6% | 5.7% | 3.9% | 5.9% |
| Retail excl. Autos | 0.4% | 0.7% | 6.9% | 5.9% | 2.0% | 2.3% |
| Wholesale | 0.6% | 1.0% | 11.1% | 10.8% | 2.0% | 1.2% |
| Manufacturing | 0.5% | 1.5% | 8.6% | 7.5% | -1.3% | -1.8% |
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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