Global| Jun 14 2011U.S. Business Inventory Accumulation Continues But I/S Ratio At Record Low
by:Tom Moeller
|in:Economy in Brief
Summary
The U.S. Commerce Department reported that business inventories rose 0.8% in April after a revised 1.3% March increase, originally reported as 1.0%. Quick inventory accumulation nevertheless left the inventory-to-sales ratio of 1.26 [...]
The U.S. Commerce Department reported that business inventories rose 0.8% in April after a revised 1.3% March increase, originally reported as 1.0%. Quick inventory accumulation nevertheless left the inventory-to-sales ratio of 1.26 near its record low. Business sales rose 0.1% (11.0% y/y) after a 2.4% March jump.
The April pickup in inventory accumulation was led by a 1.3% rise in the factory sector which roughly equaled the March and February increases. The strength in inventories was widespread amongst inventories. Durable goods inventories rose 0.9% (12.7% y/y) and nondurables rose 1.9% (11.7% y/y). Petroleum refinery inventories rose 0.7% (35.6% y/y). Factory shipments slipped 0.2% (+10.9% y/y)
Retail inventories rose 0.8% after the upwardly revised 1.0% March jump. Auto inventories rose 0.3% (9.7% y/y). Excluding autos, inventories ticked up 0.1% (4.3% y/y). Accumulation during the last year was led by a 5.8% rise in apparel, a 5.3% gain in general merchandise, a 3.5% increase in building materials and a 2.8% gain in furniture and appliance inventories. Just-in-time inventory management lowered the retail inventory-to-sales ratio to a record low 1.33. Less autos, the retail I/S ratio fell to a record low 1.19.
Wholesale inventories rose a still-strong 0.8% in April and the gain was paced by a 3.7% rise in petroleum products (21.1% y/y). Less petroleum wholesale inventories rose 0.6% and increased a strong 13.4% y/y as business activity improved. Wholesale sales rose 0.3% in April after the 3.0% March jump with higher oil prices. Less petroleum, sales slipped 0.1% (+10.7% y/y).
The manufacturing and trade data is in Haver's USECON database. Note that in a value-added feature, the database includes series calculated by Haver database managers showing sales, inventories and I/S ratios for total business less motor vehicle dealers and related wholesale operations.
| Business Inventories (%) | Apr | Mar | Feb | Apr Y/Y | 2010 | 2009 | 2008 |
|---|---|---|---|---|---|---|---|
| Total | 0.8 | 1.3 | 0.7 | 10.6 | 8.6 | -9.3 | -1.2 |
| Retail | 0.1 | 1.0 | -0.1 | 5.7 | 6.1 | -10.0 | -4.4 |
| Retail ex Motor Vehicles | 0.1 | 1.0 | 0.3 | 4.3 | 3.7 | -4.7 | -3.0 |
| Wholesale | 0.8 | 1.3 | 1.0 | 13.8 | 11.0 | -11.8 | 3.7 |
| Manufacturing | 1.3 | 1.4 | 1.2 | 12.3 | 8.7 | -6.8 | -4.1 |
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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