Wholesale Inventories Up Only Slightly

Wholesale inventories look to be pulling down on third-quarter GDP, up only 0.1 percent in August following a downwardly revised 0.3 percent decline in July. But relative to sales, which fell 1.0 percent in August and fell 0.3 percent in July, inventories are looking heavy. The stock-to-sales ratio rose to 1.31 in September from July's 1.30.

Inventories relative to sales rose in autos which is a plus given how strong auto sales proved to be in September. Inventories of machinery also rose but here sales have been uneven and the build might be unwanted. Metals show a large draw on a bounce back for sales.

As far as GDP goes, inventories are looking to have a neutral effect. Businesses are keeping their inventories in check even as sales remain on the slow side. Watch for the business inventories report on Wednesday.

Recent History Of This Indicator:
Wholesale inventories are expected to rise 0.1 percent in August, a build that would not be of concern as long as wholesale sales post a gain. Slow economic growth is making the nation's inventories look heavy.