Wholesale Sector Has Healthy Inventory Month

March was a healthy month for inventories in the wholesale sector, up only 0.1 percent at the same time that sales jumped 0.7 percent to keep the stock-to-sales ratio unchanged at 1.36. Autos are closely watched with inventories up 1.0 percent at the same time that sales fell 0.7 percent to drive the stock-to-sales ratio for this component to 1.83 from 1.80. Strong sales of autos in April should limit any further increase for this ratio in the next report. Also showing a big build was apparel as sales fell 6.2 percent. Draws relative to sales include metals, where inventories fell a sharp 2.0 percent, and petroleum products as sales surged 13.5 percent in the month. Periods of economic slowing focus close attention on inventories and the risk of unwanted overhang. Watch for the business inventories report on Friday which will include data from the retail sector.

Recent History Of This Indicator:
Wholesale inventories fell in the prior two reports in response to declining sales. But a bounce is expected for the March report with forecasters looking for a 0.3 percent build. Still, if a rise inventories is not matched with a rebound in sales, concern will increase that unwanted inventories could prove to be a major negative for future production and employment.