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Last Update: 09-May-13 10:13 ET
Wholesale Inventories
Highlights
- Wholesale inventories increased 0.4% in March after declining 0.3% in February. The Briefing.com consensus expected wholesale inventories to increase 0.3%.
Key Factors
- The BEA assumed that wholesale inventories rose 0.3% in the advance report for first quarter GDP. The slightly stronger-than-expected increase should result in a positive revision when the second estimate of first quarter GDP is released at the end of the month.
- Wholesale durable inventories increased 0.5% in March, up from a 0.1% gain in February. Most of the gain came from the automotive (1.2%) and hardware (2.1%) sectors.
- Wholesale nondurable inventories increased 0.1% after falling 0.9% in February. A 1.7% increase in apparel and a 1.2% increase in groceries offset a 3.6% decline in petroleum inventories.
- Wholesale sales fell 1.6% in March after increasing 1.5% in February. Most of the decline was the result of a 7.5% drop in petroleum sales, which was likely due to lower prices and not a drop in demand. Excluding petroleum, wholesale sale would have fallen only 0.5%.
- The inventory-to-sales ratio increased from 1.19 in February to 1.21 in March.
Big Picture
- Wholesale inventories are just one component of total business inventories. Manufacturing and retail inventories make up the rest of total business inventories. The market ignores this release and doesn't pay much attention to the full business inventory release that comes a few days later. Improved inventory management in recent years has reduced the economic swings associated with inventories and has helped produce a long-term downtrend in the inventory-to-sales ratio.
| Category | MAR | FEB | JAN | DEC | NOV |
|---|---|---|---|---|---|
| Inventories | 0.4% | -0.3% | 0.8% | 0.1% | 0.4% |
| Sales | -1.6% | 1.5% | -0.8% | 0.0% | 2.2% |
| Inventory/Sales | 1.21 | 1.19 | 1.21 | 1.19 | 1.19 |
