Wholesale inventories climbed a sharp 0.6 percent in May in a build that
is nevertheless far short of sales at the wholesale sector, up an
oversized 2.5 percent in the month. The mismatch pulls the
stock-to-sales ratio down very sharply, to an overly lean 1.24 from 1.27
in April and 1.29 in March.
The gain in sales is surprisingly
broad based: autos up 2.9 percent like the headline, computers up 4.3
percent, electrical goods up 2.2 percent, machinery up 1.3 percent,
metals up 1.2 percent, and nondurable goods up 3.1 percent.
Year-on-year
rates show how far inventories, at a 5.9 percent gain, are behind sales
which are up 11.8 percent. This report is very positive with the
inventory build a plus for second-quarter GDP and the need to restock
inventories given the enormous strength in sales a plus for production
and employment outlooks.
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