U.S. Wholesale Inventories Increase Again in October
by:Tom Moeller
|in:Economy in Brief
Summary
• Rate of increase has slowed considerably this year.
• Sales gain picks up.
• Inventory-to-sales ratio holds steady.
Wholesale inventories rose 0.5% (21.9% y/y) during October following an unrevised 0.6% September increase. The latest gain compared to a 0.5% rise in the advance report issued earlier. Monthly increases have slowed significantly since early this year. The Informa Global Markets Survey expected a 0.6% rise in for October.
Durable goods inventories rose 0.7% (24.8% y/y) in October following a 1.0% September gain. Motor vehicle & parts inventories held steady (32.6% y/y). Furniture & home furnishings inventories fell 1.8% (+35.1% y/y) while professional equipment inventories fell 0.5% (+16.1% y/y). Electrical equipment inventories eased 0.2% (+33.2% y/y) while machinery inventories gained 3.0% (25.8% y/y).
In the nondurable goods sector, inventories edged 0.2% higher (17.6% y/y) in October after holding steady in September. Petroleum & petroleum product inventories rose 2.0% (8.2% y/y). Chemical inventories fell 0.7% (+20.0% y/y). Apparel inventories fell 0.5% (+59.1% y/y) and grocery product inventories fell 1.2% (+19.3% y/y).
Wholesale sales rose 0.4% (11.9% y/y) in October after a 0.1% September rise. The Action Economics Forecast Survey expected a 0.7% rise.
Durable goods sales rose 0.8% (10.7% y/y) after increasing 0.6% in September. Motor vehicle & parts sales rose 1.2% (24.2% y/y). Sales of machinery rose 2.0% (17.1% y/y) while electrical machinery sales in October improved 0.1% (15.6% y/y). Professional equipment sales also rose 0.1% (4.0% y/y), but furniture & home furnishings sales surged 2.0% (14.3% y/y).
Sales of nondurable goods held steady (13.0% y/y) in October, after easing 0.3% in September. A 2.6% rise (24.6% y/y) in petroleum sales led the total change. Apparel sales weakened 1.9% (-1.5% y/y) but paper & product sales increased 1.7% (11.3% y/y). Chemical sales fell 0.9% (+16.2% y/y) and grocery sales were steady (+8.3% y/y) in October.
The inventory-to-sales (I/S) ratio held at 1.32 in October, up from 1.19 in July of 2021. It remained the highest ratio since September 2020. The durable goods I/S ratio stayed at 1.73 in October and compared to a low of 1.48 in July 2021. The I/S ratio for nondurable goods also was steady at 0.96 and remained at the highest level since June of last year.
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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