Wholesale auto inventories, which rose heavily relative to sales in August, fell back slightly, to a ratio of 1.58 from 1.59. Unit vehicle sales, released last week by manufacturers, firmed slightly in September which suggests that wholesale auto inventories may be a little on the light side right now which is good news for manufacturers.
Apparel wholesale inventories also lightened up as did hardware inventories. But there are sectors showing unwanted builds including computers, machinery, drugs, and paper products.
Data released last week in the factory orders report showed no unwanted inventory pressures for manufacturers in September. The missing piece for September inventories, retail inventories, will be released Friday with the business inventories report. Lean levels of inventories may be a negative for GDP calculations but are a plus for the production and employment outlooks.
Recent History Of This Indicator:
Wholesale inventories in August swelled by 0.7 percent against a very sharp 0.7 percent decline in sales. The mismatch drove the stock-to-sales ratio in the sector up 2 notches, to 1.19 from 1.17 for the heaviest reading since February. Much of the build was tied to autos where inventories rose 0.6 percent while sales fell 0.5 percent. Large builds for autos were welcome in prior months given the very solid strength for sales, but manufacturer sales in September fell which points to the risk of another unwanted build underway. Excluding autos, the wholesale sector's stock-to-sales ratio rose only 1 notch, to 1.15 from 1.14. Other sectors besides autos showing heavier inventories include farm products, lumber, professional equipment, and petroleum products where sales fell very sharply.
Wholesale inventories in August swelled by 0.7 percent against a very sharp 0.7 percent decline in sales. The mismatch drove the stock-to-sales ratio in the sector up 2 notches, to 1.19 from 1.17 for the heaviest reading since February. Much of the build was tied to autos where inventories rose 0.6 percent while sales fell 0.5 percent. Large builds for autos were welcome in prior months given the very solid strength for sales, but manufacturer sales in September fell which points to the risk of another unwanted build underway. Excluding autos, the wholesale sector's stock-to-sales ratio rose only 1 notch, to 1.15 from 1.14. Other sectors besides autos showing heavier inventories include farm products, lumber, professional equipment, and petroleum products where sales fell very sharply.
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