U.S. Wholesale Inventory Accumulation Continues To Firm

Inventories at the wholesale level increased 0.5% (4.7% y/y) during February following a 0.8% January jump. The strength owed to a 0.7% rise (5.9% y/y) in the durable goods sector. That was driven by a 2.2% jump (5.6% y/y) in computer equipment and a 1.4% rise (12.2% y/y) in machinery & equipment. Construction materials inventories also showed a firm 1.2% increase (7.1% y/y). In the nondurable goods sector inventories ticked 0.1% higher (2.9% y/y). Farm product inventories rose 2.7% (-4.6% y/y) and drugs & druggist sundries gained 2.0% (18.9% y/y). Offsetting this strength was a 2.6% decline (-12.4% y/y) in petroleum inventories. Paper & paper product inventories fell 2.0% and chemicals were off 1.3% (+5.8% y/y).

Wholesale sales rebounded 0.7% (3.1% y/y) following January's 1.8% unrevised decline. Nondurable goods sales increased 1.2% (3.3% y/y). Recent volatility reflected a 4.0% increase (6.7% y/y) in petroleum sales which followed a 5.2% January drop. Apparel sales gained 1.8% (0.7% y/y) and drug sales increased 1.6% (9.5% y/y). Continuing strong were chemical sales, up 1.5% (5.1% y/y). In the durable goods sector, sales ticked up 0.1% (2.9% y/y) after a 0.9% shortfall. Machinery sales rose 1.8% (11.9% y/y) while motor vehicles gained 0.3% (3.2% y/y). To the downside, construction materials sales declined 2.9% (+0.2% y/y) and electrical equipment sales were off 1.6% (+2.2% y/y).

The wholesale sector's inventory-to-sales ratio remained stable m/m at 1.19 but its risen from 1.16 at year-end. In the durable goods sector, the I/S ratio rose to 1.60 versus 1.55 last February. It  reflects strength in machinery where the ratio rose to 2.50. In the nondurables sector, the I/S ratio of 0.84 was down slightly m/m and versus last year. A lower petroleum ratio of 0.29 reflected much of the shortfall.

The wholesale trade figures are available in Haver's USECON database.