Haver Analytics
Haver Analytics
Global| Jul 15 2008

U.S. Business Inventories' Trend Growth Slower

Summary

Total business inventories rose 0.3% during May after a 0.5% April gain. The latest increase fell short of expectations and it reduced three-month growth in inventories to 4.1% (AR) which was its slowest since November. Retail [...]


Total business inventories rose 0.3% during May after a 0.5% April gain. The latest increase fell short of expectations and it reduced three-month growth in inventories to 4.1% (AR) which was its slowest since November.

Retail inventories fell 0.4% and reversed all of the March increase. The three-month growth rate fell further to a negative 2.2% which reflects the draw-down of automobile inventories. Inventories of motor vehicle & parts fell at a 7.6% annual rate during the last three months due to further production cutbacks. Outside of autos, retail inventories rose at a slight 0.4 rate over the last three months versus a 2.7% rise last year and a 4.9% increase during 2006.

The industry detail in the retail sector indicated that furniture inventories fell at a 1.4% rate during the last three months. Clothing & accessory store inventories continued to fall sharply at a 4.1% rate while general merchandise stores' inventories dropped at a 2.0% rate.

Wholesale inventories rose at a 9.7% rate during the last three months, boosted by the rise in oil prices but less petroleum inventories also rose at a firm 9.8% rate which was twice the rate of increase during all of last year.

Factory inventories rose 0.5% after the sight decline during April. Three-month growth fell to 5.9% (AR) which was half the growth earlier this year. Despite the rise in oil prices, petroleum inventories still rose at a modest 2.1% rate over the last three months. Elsewhere, factory inventory accumulation has been fairly steady in 2008 at a 6.2% rate.

Total business sales surged again, in May by 0.8%. Three-month growth jumped to a 15.1% annual rate.

The inventory-to-sales ratio for all business fell to 1.24 in May which was the low for this cycle.

Fed Chairman ChairmanBen S. Bernanke's Semiannual Monetary Policy Report to the Congress can be found here.

Business Inventories May April Y/Y 2007 2006 2005
Total 0.3% 0.5% 5.3% 3.8% 5.9% 6.0%
  Retail -0.4% 0.4% 1.7% 2.6% 3.5% 2.3%
    Retail excl. Auto -0.2% 0.7% 1.6% 2.7% 4.9% 3.9%
  Wholesale 0.8% 1.4% 8.7% 5.5% 8.3% 7.3%
  Manufacturing 0.5% -0.0% 6.1% 3.7% 6.4% 8.9%
  • 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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