Wholesale Inventories And Sales Surge

If overheating is suddenly an issue for the economy, as it may be given the spike in average hourly earnings in this morning's employment report, then wholesale trade data offer confirmation. Inventories in the sector surged 0.9 percent in August following July and June's already outsized surges of 0.6 percent each. Sales in the sector are even stronger, up 1.7 percent in August which, despite the jump inventories, pulls the stock-to-sales ratio down one notch to 1.28. Strength in autos is a major factor boosting the data though ex-auto data also show unusual strength, up 0.8 percent for inventories and 1.5 percent for sales. Inventory data for retailers and manufacturers are not showing the same pressure as the wholesale sector, at least yet.

Recent History Of This Indicator:
Wholesale trade inventories are expected to rise 1.0 percent which would be no change from the advance report. Wholesalers have been building their inventories aggressively the last several months though an outsized build for August could also reflect transportation snags tied to hurricane effects.