Total business inventories nudged just 0.1% higher in December (3.9% y/y) versus an unrevised 0.2% November rise. During the last three months, inventory growth slowed to 1.8% (AR) from its high of 7.6% late in 2013. Total business sales, however, fell. A 0.9% decline in December (+0.9% y/y) was the fifth consecutive monthly shortfall. It lowered the 3-month change to -6.1% (AR) versus +11.4% as of last April. The resulting inventory/sales ratio for December rose to 1.33, its highest level since July 2009.

Inventories in the retail sector gained 0.5% during December (2.8% y/y). It raised three-month growth to 0.8% but that was below the double-digit growth at the end of 2013. Auto inventories rose 1.3% in December (3.7% y/y) but fell at a 1.1% rate during the last three months. Clothing inventories increased 1.3% (3.2% y/y) and by 9.4% (AR) since September. Furniture inventories rose 0.4% (2.6% y/y) and at a 3.8% rate in the last three months. General merchandise inventories slipped 0.1% (+0.9% y/y) and were off at a 1.5% rate in the last three months.

Merchant wholesale inventories gained 0.1% (6.7% y/y) in December. The 6.0% rate of growth last quarter was up slightly from Q3. Factory inventories declined 0.3% (+2.7% y/y). It lowered three-month growth to -0.7%. This represented decumulation for the first time since 2009.

The 0.9% decline in business sales reflected weakness in the retail sector. A 1.1% December decline (+2.6% y/y) left three-month sales down at a 2.3% rate. Sales excluding motor vehicles fell 1.2% (+1.0% y/y) and at a 4.4% rate since June. Wholesale sales fell 0.4% (+1.4% y/y) leaving three-month sales falling at a 3.4% rate. Factory shipments declined 1.1% (-0.9% y/y) and at an 11.3% rate during the last three months.

The rise in the total business inventory-to-sales ratio to 1.33 reflected gains in each business sector as inventory growth outpaced sales. The factory sector's rise to 1.34 left the ratio at its highest since early-2009. The same was true for the wholesale sector ratio of 1.22. Any build-up at the retail level has been more controlled as the I/S ratio has been moving sideways for a year. The ratio excluding autos, however, rose sharply in the last three months to its highest level since February.

The manufacturing and trade data are in Haver's USECON database.