Haver Analytics
Haver Analytics
| Mar 07 2023

U.S. Wholesale Inventories Decline in January

  • Inventory growth continues to weaken y/y.
  • Sales rebound m/m; trend gain slows significantly.
  • Inventory-to-sales ratio remains elevated.

Wholesale inventories fell 0.4% (+15.8% y/y) during January following an unrevised 0.1% December uptick. The decline matched the change in the advance report issued earlier. Inventory growth has slowed considerably since early last year.

Durable goods inventories eased 0.1% (+18.0% y/y) in January following a 0.7% December gain. Motor vehicle & parts inventories fell 0.5% (+25.1% y/y). Furniture & home furnishings inventories declined 2.7% (+14.1% y/y) while professional equipment inventories fell 1.1% (+6.6% y/y). Electrical equipment inventories rose 0.3% (21.9% y/y) while machinery inventories gained 1.8% (29.8% y/y).

In the nondurable goods sector, inventories declined 0.9% (+12.4% y/y) in January, the same as in December. Petroleum & petroleum product inventories rose 1.3% (13.8% y/y). Chemical inventories declined 1.6% (+10.0% y/y), the fifth straight monthly decline. Apparel inventories declined 5.5% (+36.2% y/y) and grocery product inventories fell 1.0% (+9.1% y/y).

Wholesale sales rose 1.0% (3.6% y/y) in January after declining 0.2% in December. The yearly gain is reduced significantly from the 23.4% rise in January 2022. The Action Economics Forecast Survey expected a 0.8% monthly gain. Durable goods sales rose 0.7% (-0.5% y/y) after a 0.5% December gain. Motor vehicle & parts sales strengthened 1.2% (9.7% y/y). Sales of machinery rose 1.2% (15.8% y/y) while electrical machinery sales increased 2.4% (-4.6% y/y). Professional equipment sales weakened 2.0% (-6.7% y/y), and furniture & home furnishings sales declined 1.7% (+3.2% y/y).

Sales of nondurable goods rose 1.3% (7.4% y/y) in January after declining in five of the previous six months. A 3.5% rise (10.1% y/y) in petroleum sales was accompanied by a 0.6% drop (-8.7% y/y) in apparel sales. Chemical sales weakened 4.0% (-2.1% y/y) and farm product sales eased 0.3% (+17.5% y/y). Paper product sales fell 2.5% (1.0% y/y).

The inventory-to-sales (I/S) ratio fell to 1.34 in January but remained up from a low of 1.19 in July of 2021. The I/S ratio in the durable goods sector fell to 1.79 but compared to a low of 1.48 in July 2021. The I/S ratio for nondurable goods eased to 0.95 but was higher than the 0.91 low in February 2022.

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.

  • 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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