U.S. Wholesale Inventories Continue to Rise in November
by:Tom Moeller
|in:Economy in Brief
Summary
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Growth remains below earlier in the year.
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Sales continue to trend sideways.
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Inventory-to-sales ratio increases.
Wholesale inventories rose 1.0% (20.9% y/y) during November following a 0.6% October increase, revised from 0.5%. The increase compared to a 0.8% rise in the advance report issued earlier. Inventory growth has slowed considerably since early this year.
Durable goods inventories rose 1.1% (22.9% y/y) in November following a 0.8% October gain. Motor vehicle & parts inventories held steady (27.8% y/y). Furniture & home furnishings inventories rose 1.4% (27.4% y/y) while professional equipment inventories strengthened 1.0% (16.6% y/y). Electrical equipment inventories rose 0.9% (29.2% y/y) while machinery inventories gained 2.2% (27.2% y/y).
In the nondurable goods sector, inventories increased 0.7% (17.9% y/y) in November after rising 0.3% in October. Petroleum & petroleum product inventories rose 0.6% (18.7% y/y). Chemical inventories fell 2.1% (+17.7% y/y). Apparel inventories rose 2.3% (56.6% y/y) and grocery product inventories held steady (16.1% y/y).
Wholesale sales declined 0.6% (+8.7% y/y) in November after easing slightly in October. The Action Economics Forecast Survey expected a 0.3% rise. Durable goods sales weakened 1.7% (+6.4% y/y) after increasing 0.3% in October. Motor vehicle & parts sales fell 2.4% (+18.6% y/y). Sales of machinery rose 0.9% (15.2% y/y) but electrical machinery sales fell 2.0% (+8.9% y/y). Professional equipment sales weakened 1.9% (-0.0% y/y), but furniture & home furnishings sales rose 0.6% (14.2% y/y).
Sales of nondurable goods rose 0.4% (10.7% y/y) in November after falling 0.3% in both of the prior two months. A 1.4% decline (+14.9% y/y) in petroleum sales was accompanied by a 0.4% rise (-2.6% y/y) in apparel sales. Chemical sales improved 0.5% (11.8% y/y) and grocery sales rose 0.6% (8.3% y/y).
The inventory-to-sales (I/S) ratio increased to 1.35 in November, up from a low of 1.19 in July of 2021. It was the highest ratio since June 2020. The I/S ratio in the durable goods sector rose to 1.79 and compared to a low of 1.48 in July 2021. The I/S ratio for nondurable goods also was little-changed at 0.97 and remained at the highest level since May 2021.
The wholesale trade figures are available in Haver's USECON database. The expectations figure for inventories is contained in the MMSAMER database. Expectations for sales are in the AS1REPNA database.
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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