WASHINGTON - The value of wholesale inventories rose 0.9% in August, a downward adjustment from the 1.0% gain estimated in the advance estimate, while wholesale sales rose 1.7%, data released Friday by the U.S. Commerce Department showed.
Looking ahead to business inventories report to be released on October 13, the tracking looks positive for both business inventories and business sales.
With the addition of the 0.9% gain for wholesale inventories reported Friday, an MNI calculation expects a 0.7% increase in business inventories when it is released, assuming no revision to the 0.7% increase reported for retail inventories in the advance estimate. Factory inventories were reported yesterday up 0.4% for August.
The 1.7% increase for wholesale sales reported Friday, offsets a 0.3% decline for retail trade sales from last month's advanced sales release and a moderate 0.5% increase for factory shipments reported October 5, adding up to a 0.7% increase for business sales barring a large revision to retail trade sales.
With the rise in August wholesale inventories, but the larger increase in wholesale sales, the inventory/sales ratio fell to 1.28 from 1.29 in July, hitting its lowest since December 2014. The ratio was still below the 1.32 mark in August 2016, as sales have increased faster than inventories over the last year.
Excluding the auto category, wholesale inventories would have been up 0.8% in August after a 0.7% increase in the previous month, an MNI calculation showed. Sales would have been +1.5% in August if auto sales were excluded. This followed a small 0.1% gain in July, with the year-over-year being +6.7%.
The value of durable inventories rose by 0.8% in the month, though auto inventories rose by 2.2%. The remaining durables components all posted positive gains, with the exception of machinery which was flat for the month. The biggest gains were in autos and metals, which rose by 2.3%.
Nondurables inventories were up 1.2% in August. The biggest gains were seen in drugs, which was up 3.7%, paper up 1.8%, and petroleum up 1.7%. Other components were mixed, with apparel, alcohol, and misc. nondurables posting a negative.
Durables goods sales were up 2.0% in the month, with auto sales up 4.2%. The remaining components were mixed, with gains in everything except furniture and lumber.
Nondurable goods sales were up 1.5% in August after a 0.2% loss in July. Petroleum sales were up 6.1% after a small 0.1% increase in July. The other component movements were split between gains and losses.
US Commerce stated that it cannot isolate the effect of Harvey on the data, but that they did receive indications that it caused both positive and negative effects.
