Wholesale Inventories Drop 0.4%; Sales Up 1.4% in Oct.

WASHINGTON – The value of wholesale inventories fell 0.4% in October, the same decline reported in the advance estimate, while sales surged 1.4%, data released Friday by the U.S. Commerce Department showed.

Excluding the auto category, wholesale inventories would have been still been down 0.4% in October after a 0.3% increase in the previous month, an MNI calculation showed. Sales would have been up 1.5% in October if auto sales were excluded. This followed a 0.3% gain in September.

As a result of the movements in inventories and sales, the overall inventory-to-sales ratio fell to 1.30 in October from 1.32 in September, and is now since matching 1.30 in January 2015.

Factory inventories were flat in October, as previously reported. With the addition of the expected decline for wholesale inventories reported Friday, the outlook for business inventories is for a 0.2% decrease if the 0.4% decline in retail inventories in the advance estimate holds, an MNI calculation shows.

The 1.4% surge in wholesale sales reported Friday comes on top of a 1.0% rise in retail trade sales in last month's retail sales report and a 0.4% increase for factory shipments, suggesting a 0.9% gain for business sales barring a large revision to retail trade sales. 

The value of durable inventories fell 0.3% in the month, though auto inventories rose by 0.3%. The remaining durables components were split between gains and declines.

Nondurables inventories were down 0.4% on a large decline in drug inventories. Petroleum inventories actually rose 1.9%.

Durables goods sales rose by 1.1%, though auto sales posted a very modest 0.1% gain in the month. Sales were also higher for all of the other components except for professional equipment and its subcategory computer equipment.

Nondurable goods sales jumped 1.6% after a 0.5% September increase. Petroleum sales were surged 6.6% after a 6.8% rise in September, while the remaining components were mixed.

Market News International is a real-time global news service for fixed-income and foreign exchange market professionals. See www.marketnews.com.

Market News International is a real-time global news service for fixed-income and foreign exchange market professionals. See www.marketnews.com.
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