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Economy in Brief

U.S. Wholesale Inventories Continue Their Ascent in May
by Kathleen Stephansen, CBE  July 8, 2022

• Wholesale inventories continue to rise in May but at a softer pace than in the three preceding months.

• Wholesale sales were mixed.

• Inventory-to-sales ratio was little changed in May.

Wholesale inventories rose 1.8% m/m (24.7% y/y) in May compared to a rise of 2.0% in the advance estimate. Inventories rose 2.3% m/m (24.1% y/y) in April. The Informa Global Markets Survey expected a rise of 2.0% in May. Durable goods inventories rose 1.8% m/m (26.0% y/y) in May, following a 2.3% m/m (25.4% y/y) rise in April. Inventories in several industries contributed to the monthly rise. Motor vehicle and motor vehicle parts and supplies inventories rose 1.8% m/m (16.6% y/y), furniture & home furnishings inventories rose 3.5% m/m (47.1% y/y), inventories for metals and minerals excluding petroleum rose 2.5% m/m (39.4% y/y), electrical equipment inventories also rose 2.5% m/m (35.8% y/y) and hardware, plumbing equipment rose 2.8% m/m (38.2% y/y).

In the nondurable goods sector, inventories rose 1.8% m/m (22.8% y/y), following a rise of 2.3% m/m (22.3% y/y) in April, with petroleum & petroleum products inventories leading the way with a rise of 5.3% m/m (35.9% y/y), followed by apparel inventories rising 3.4% m/m (49.3% y/y).

Wholesale sales increased 0.5% m/m (20.9% y/y) in May, following a 0.8% m/m (21.0 y/y) rise in April. The Action Economics Forecast Survey called for a 0.7% rise in May. Durable goods sales dropped 0.7% m/m (13.1% y/y) after a 0.3% m/m (15.8% y/y) rise in April. Motor vehicle and motor vehicle parts and supplies sales drove the decline with a monthly drop of 3.1% (2.4% y/y), followed by a decline of 0.6% m/m (21.0% y/y) in furniture & home furnishings sales. Sales of machinery partially offset these declines with a 1.9% m/m (15.6% y/y) rise in May.

Sales of nondurable goods gained 1.6% m/m (28.5% y/y) in May, after a 1.2% m/m (26.0% y/y) rise in April. The sales were led by a rise in chemical and allied products sales of 3.0% m/m (27.4% y/y) and in petroleum & petroleum products sales of 2.1% m/m (71.1% y/y).

The inventory-to-sales (I/S) ratio rose ever so slightly to 1.26 in May from 1.25 in April. The durable goods I/S ratio rose to 1.64 in May from 1.60 in April, while the I/S ratio for non-durable goods held steady at 0.93.

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.

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