U.S. Business Inventories Stay Strong & Steady in November
by:Tom Moeller
|in:Economy in Brief
Summary
- Broad-based inventory growth led by retail.
- Sales increase moderates across sectors.
- Inventory-to-sales ratio edges higher.
Total business inventories increased 1.3% (8.7% y/y) during November as they did in October, revised from 1.2%. A 1.0% gain had been expected in the Informa Global Markets Survey. Business sales rose 0.7% (17.6% y/y) in November following a 2.2% October gain. The inventory-to-sales ratio edged higher to 1.25 in November but remained near its ten-year low.
Retail inventories surged 2.0% (0.6% y/y) after a 0.3% October rise. Retail inventories excluding motor vehicles rose 1.3% (10.7% y/y) in November after rising 0.7% in October. Motor vehicle inventories surged 4.2% (-21.3% y/y) following three months of significant decline. Apparel inventories strengthened 1.7% (5.2% y/y) after two months of similar increase. General merchandise store inventories rose 0.8% (11.1% y/y) following a 1.1% increase. Home furnishings & appliance inventories declined 0.4% (+17.5% y/y), off for the second straight month. Wholesale sector inventories surged 1.4% (15.9% y/y) following a 2.5% October jump. Factory inventories increased 0.7% (9.0% y/y) in November after a 0.9% October rise.
Retail sales edged 0.1% higher (16.2% y/y) in November following a 2.0% October surge. Sales excluding motor vehicles also improved just 0.1% (16.2% y/y). Wholesale sales surged 1.3% (23.2% y/y), the third month of strong increase. Factory shipments increased 0.7% (13.0% y/y) following a 2.0% gain in October.
With the inventory rise outpacing sales, the overall inventory-to-sales ratio rose slightly to 1.25 in November. The retail I/S ratio rose to 1.09 and retraced its October decline. The wholesale I/S ratio was unchanged at 1.22 and the manufacturing I/S ratio remained steady as well at 1.46, its lowest since June 2019.
The manufacturing and trade data are in Haver's USECON 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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