Global| Jul 15 2014U.S. Business Inventory Increase Remains Firm
by:Tom Moeller
|in:Economy in Brief
Summary
Total business inventories increased 0.5% in May (5.6% y/y) after an unrevised 0.6% advance during April. The stronger y/y rise contrasted with the 3.0% gain last summer. Inventories in the factory sector rose 0.8% (3.8%). Wholesale [...]
Total business inventories increased 0.5% in May (5.6% y/y) after an unrevised 0.6% advance during April. The stronger y/y rise contrasted with the 3.0% gain last summer. Inventories in the factory sector rose 0.8% (3.8%). Wholesale inventories continued strong, posting a 0.5% rise (7.9% y/y), and retail inventories edged 0.2% higher (5.7% y/y).
Factory sector inventories gained 0.8% (3.8% y/y) reflecting a 0.9% increase (5.4% y/y) in durables and a 0.6% rise (1.4% y/y) in nondurables. The 0.5% advance in wholesale inventories reflected a 1.0% gain (8.5% y/y) in durables driven by a 1.9% rise (10.4% y/y) in motor vehicles. Machinery inventories also were strong, up 1.1% (13.5% y/y). Lumber inventories increased 1.2% (8.6% y/y). Nondurables inventories fell 0.3% (+6.9% y/y) as farm product inventories were off 3.2% (+5.3% y/y).
Retail inventories edged 0.2% higher (5.7% y/y) after a 0.5% April rise. The increase reflected a 0.6% gain (10.7% y/y) in auto inventories. Nonauto inventories ticked 0.1% higher (3.4% y/y) for the third straight month. Inventories at clothing & accessory stores increased 0.4% (1.8% y/y) and general merchandise store inventories gained 0.3% (3.2% y/y). Elsewhere, inventories fell. Furniture, electronics & appliances inventories declined 0.5% (+3.2% y/y) while food & beverage store inventories were off 0.3% (+2.5% y/y). Building materials inventories declined 0.4% (+2.3% y/y) and furniture & home furnishings inventories fell 0.5% (+3.2% y/y).
The latest inventory gains were accompanied by a firm 0.4% increase (4.6% y/y) in business sales which followed a 0.8% rise during April. Merchant wholesale sales gained 0.7% (6.6% y/y). Retail sales increased a lessened 0.4% (4.4% y/y) and excluding autos sales increased 0.3% (3.1% y/y). Shipments from the factory sector ticked 0.1% higher (2.9% y/y).
The overall inventory-to-sales ratio held steady at 1.29, down a bit from the 1.31 January high. The I/S ratio in the wholesale sector was unchanged at 1.18 but in the factory sector it ticked up to 1.31. In the retail sector, the inventory-to-sales ratio held at a lessened 1.41 while the nonauto retail ratio slipped to 1.22.
The manufacturing and trade data are in Haver's USECON database.
| Manufacturing & Trade (%) | May | Apr | Mar | May Y/Y | 2013 | 2012 | 2011 |
|---|---|---|---|---|---|---|---|
| Business Inventories | 0.5 | 0.6 | 0.4 | 5.6 | 4.3 | 4.9 | 7.9 |
| Retail | 0.2 | 0.5 | 0.1 | 5.7 | 7.1 | 7.4 | 3.7 |
| Retail excl. Motor Vehicles | 0.1 | 0.1 | 0.1 | 3.4 | 3.8 | 3.2 | 3.5 |
| Merchant Wholesalers | 0.5 | 1.0 | 1.1 | 7.9 | 4.0 | 5.5 | 9.2 |
| Manufacturing | 0.8 | 0.5 | 0.2 | 3.8 | 2.3 | 2.4 | 10.2 |
| Business Sales (%) | |||||||
| Total | 0.4 | 0.8 | 1.1 | 4.6 | 3.4 | 4.5 | 10.9 |
| Retail | 0.4 | 0.7 | 1.5 | 4.1 | 4.3 | 5.0 | 7.7 |
| Retail excl. Motor Vehicles | 0.3 | 0.7 | 0.8 | 3.1 | 3.0 | 4.0 | 7.1 |
| Merchant Wholesalers | 0.7 | 1.3 | 1.6 | 6.6 | 4.3 | 4.8 | 12.4 |
| Manufacturing | 0.1 | 0.4 | 0.4 | 2.9 | 2.0 | 4.0 | 12.1 |
| I/S Ratio | |||||||
| Total | 1.29 | 1.29 | 1.29 | 1.28 | 1.28 | 1.28 | 1.26 |
| Retail | 1.41 | 1.41 | 1.42 | 1.40 | 1.40 | 1.38 | 1.36 |
| Retail Excl. Motor Vehicles | 1.22 | 1.23 | 1.23 | 1.22 | 1.22 | 1.21 | 1.23 |
| Merchant Wholesalers | 1.18 | 1.18 | 1.18 | 1.16 | 1.17 | 1.18 | 1.15 |
| Manufacturing | 1.31 | 1.30 | 1.30 | 1.30 | 1.29 | 1.29 | 1.29 |
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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