U.S. Wholesale Inventories Remain Little Changed in April
- Durable goods inventories rise, while nondurables decline.
- Sales edge higher after sharp retreat.
- Inventory-to-sales ratio eases from three-year high.
Wholesale inventories fell 0.1% (+6.3% y/y) in April following a 0.2% March decline. This was revised from the advance report of a 0.5% decline. Inventory growth has slowed considerably since a 25.6% y/y peak increase in June 2022. A 0.2% April decline had been expected in the Informa Global Markets Survey.
Durable goods inventories rose 0.6% (11.1% y/y) in April after holding steady in March. Machinery inventories jumped 2.1% (26.7% y/y) while metals inventories strengthened 1.6% (1.4% y/y). Electrical equipment inventories rose 0.7% (13.9% y/y) as motor vehicle & parts inventories edged 0.3% higher (22.4% y/y). These gains were offset by furniture & home furnishings inventories which fell 0.5% (-1.1%), following four consecutive months of decline. Professional equipment inventories fell 0.7% (-1.1% y/y), down for the fifth month in the last six.
In the nondurable goods sector, inventories declined 1.2% (-0.5% y/y) in April, the fifth consecutive monthly drop. Farm product inventories fell 7.1% (-34.6% y/y) while paper inventories fell 2.5% (-3.9% y/y), about the same as in March. Apparel inventories were off 2.3% (+8.4% y/y). Chemical inventories fell 1.8% both m/m and y/y), the eighth consecutive monthly decline. To the upside, petroleum & petroleum product inventories rose 1.5% (-2.5% y/y) following four straight monthly declines. Grocery product inventories rose 0.5% (2.4% y/y).
Wholesale sales rose 0.2% (-3.4% y/y) in April after falling 2.7% in March. The Action Economics Forecast Survey expected a 1.0% monthly gain.
Durable goods sales fell 0.5% (-3.5% y/y) after declining 2.7% in March. Motor vehicle & parts sales weakened 0.8% (+8.5% y/y). Sales of machinery were off 2.1% (+8.0% y/y) while electrical machinery sales edged 0.1% higher (-3.1% y/y). Professional equipment sales rose 0.6% (-3.9% y/y) but furniture & home furnishings sales fell 1.9% (-8.4% y/y).
Sales of nondurable goods rose 0.8% (-3.4% y/y) in April following two straight months of decline. Farm product sales jumped 7.4% (-3.8% y/y). A 1.2% rise (-17.5% y/y) in petroleum sales was accompanied by a 2.5% gain (-1.5% y/y) in chemical product sales. To the downside, apparel sales fell 4.6% (-12.7% y/y) and paper product sales declined 1.5% (-8.7% y/y). Grocery product sales fell 2.0% (+1.5% y/y).
The wholesale inventory-to-sales (I/S) ratio eased to 1.40 in April from 1.41 in March. It remained near the highest ratio since June 2020. The I/S ratio in the durable goods sector rose to 1.85 and compared to a low of 1.47 in June 2021. The I/S ratio for nondurable goods eased to 1.01 from 1.03 which was the highest since November 2020.
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 MoellerAuthorMore 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.