Last Update: 10-Mar-15 10:18 ET
- Wholesale inventories increased 0.3% in January after a downward revision revealed no change (from +0.1%) in December. The Briefing.com Consensus expected wholesale inventories to decline 0.1%.
- Surprisingly, the sharp drop in petroleum prices did not lead to a large decline in petroleum inventories. These inventories only declined 1.1% in January after declining 7.2% in December. Altogether, nondurable goods inventories declined a modest 0.1% in January.
- The small decline in nondurable inventories was more than offset by a 0.6% increase in durable inventories. Large gains were recorded in electrical (+2.4%), autos (+1.6%), and metals (+1.5%).
- Wholesale sales declined 3.1% in January after declining 0.9% in December. While some of the January decline was due to price shifts in oil prices -- petroleum sales fell 13.5% -- weak sales occurred in most of the wholesale sectors.
- The inventory-to-sales ratio spiked to 1.27 in January. That is the largest ratio since it reached that same level in July 2009.
- 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.