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Friday, June 8, 2018

Wholesale Inventories Inch Higher, Sales Surge

Inventories need to be built up in the wholesale sector in what may be soft news for GDP, where low inventory numbers are a negative, but very good news for production and employment. Wholesale inventories inched only 0.1 percent higher in April against, however, a 0.8 percent surge in sales. This mismatch pulls down the stocks-to-sales ratio to a very lean 1.28. Year-on-year rates confirm the imbalance with inventories up 5.8 percent against a 7.8 percent rise in sales.

The nation's businesses, wholesalers included, have been very conservative in their inventory manage, reflected not only in hard data like today's report but also anecdotal reports like ISM manufacturing where more and more of the respondents say inventories of finished goods are too low.

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