WASHINGTON – The value of wholesale inventories rose 0.2% in March, a sharp upward adjustment from the 0.1% decline estimated in the advance estimate, while wholesale sales were flat, data released Tuesday by the U.S. Commerce Department showed.
Looking ahead to Friday's report, the tracking looks positive for business inventories, but not for sales. Factory inventories were flat in March, as previously reported. With the addition of the small gain for wholesale inventories reported Tuesday, the outlook for business inventories is for a 0.2% increase if the 0.4% gain for retail inventories in the advance estimate holds, an MNI calculation shows.
The flat reading for wholesale sales reported Tuesday comes on top of 0.1% declines for factory shipments reported last week and for retail trade sales following annual revisions, adding up to a 0.1% decrease for business sales barring a large revision to retail trade sales.
Even with the gain in wholesale inventories and the modest decline in wholesale sales, the inventory/sales ratio held steady at 1.28 in March. The ratio was well below the 1.35 mark in March 2016, as sales have risen significantly faster than inventories over the last year.
Excluding the auto category, wholesale inventories would have been flat in March after a 0.3% increase in the previous month, an MNI calculation showed. Sales would have been down 0.1% in March if auto sales were excluded. This followed a 1.2% gain in February.
The value of durable inventories rose 0.6% in the month, as auto inventories rose by 1.9%. The remaining durables components were all higher except for metals, machinery, and the "miscellaneous durables" category.
Nondurables inventories were down 0.5% on a 3.0% decline in petroleum inventories. The remaining categories were mixed.
Durables goods sales were flat in the month, with auto sales up 0.7%. The remaining components were mixed, with a 1.8% decline in the professional equipment category and a 0.3% drop in the large electrical equipment category standing out.
Nondurable goods sales were flat in March after a 0.9% February increase. Petroleum sales reversed by 0.6% after a 1.7% increase in February. The other component movements were mixed, with declines in drugs offsetting a solid gain in groceries.
