U.S. Business Inventory Accumulation Continues; Sales Strengthen

Total business inventories increased 0.3% (4.4% y/y) during April following a 0.1% March slip. Total business sales rose 0.4% (6.7% y/y), following a 0.6% gain. The inventory-to-sales ratio held steady at 1.35. It peaked early in 2016 at 1.43.

Retail inventories increased 0.5% (2.5% y/y) in April after a 0.7% decline during March. Auto inventories grew 0.7% (1.9% y/y) after a 0.9% fall. Non-auto retail inventories increased 0.4% (2.8% y/y) following a 0.6% decline. General merchandise inventories rose 0.8% (-0.6% y/y) after a 1.9% shortfall. In the department store sector, inventories edged 0.5% higher (-4.9% y/y) following a 1.2% drop. Building materials inventories gained 0.5% (5.7% y/y) after a 0.2% rise, while clothing store inventories rose 0.4% (0.6% y/y) after falling 0.6%. Inventories of furniture, electronics and appliances declined 0.3% (+1.4% y/y), the fifth decline in seven months. As reported last week, wholesale inventories edged 0.1% higher (5.8% y/y) following a 0.2% rise. Factory sector inventories rose 0.3% (5.0% y/y) following a 0.2% gain.

Retail sales increased 0.4% in April (4.9% y/y) with non-auto sales up 0.5% (5.2% y/y). Wholesale sector sales increased 0.8% (7.8% y/y) after improving 0.4%. Shipments from the factory sector held steady (7.2% y/y) following a 0.7% rise.

The inventory-to-sales (I/S) ratio in the retail sector held steady at 1.44 in April, down from the levels averaged during the prior two years. The non-auto I/S ratio held steady at 1.21 and remained near its lowest level since early-2012. The wholesale sector I/S ratio eased to 1.28, nearly its lowest level since December 2014. The manufacturing sector I/S ratio held steady at 1.35, its lowest point in three years.

The manufacturing and trade data are in Haver's USECON database.