Wholesale Inventory Build Continues as Retail Sales Flounder

Wholesale inventories rose 1.0% nearly matching the consensus 1.1% estimate.

The Census Bureau Monthly Wholesale Report for February shows inventories rose 1.0 percent nearly matching the Econoday consensus. It wasn't a difficult guess in light of the advance (preliminary) Census Bureau estimates.

  • Sales: February 2018 sales of merchant wholesalers, except manufacturers’ sales branches and offices, after adjustment for seasonal variations and trading-day differences but not for price changes, were $495.9 billion, up 1.0 percent from the revised January level and were up 6.8 percent from the February 2017 level. The December 2017 to January 2018 percent change was revised from the preliminary estimate of down 1.1 percent to down 1.5 percent.
  • Inventories: Total inventories of merchant wholesalers, except manufacturers’ sales branches and offices, after adjustment for seasonal variations but not for price changes, were $625.6 billion at the end of February, up 1.0 percent from the revised January level. Total inventories were up 5.5 percent from the revised February 2017 level. The January 2018 to February 2018 percent change was revised from the advance estimate of up 1.1 percent to up 1.0 percent.
  • Inventories to Sales Ratio: The February inventories/sales ratio for merchant wholesalers, except manufacturers’ sale offices, based on seasonally adjusted data, was 1.26. The February 2017 ratio was 1.28.

Monthly Inventory/Sales Ratio

Wholesale Sales, Inventories, Ratio

In light of retail sales falling three consecutive months, this inventory buildup appears questionable.

Autos? Why? Furniture? Why?

For discussion of retail sales, please see Confidence? Retail Sales Down Third Month.

Of course it could be that Globally Bad Weather we have been talking about.

Mike "Mish" Shedlock

@KId, highly likely that there is some forward buying at wholesale. I still think this trade war meme is orchestrated as an attempt to fire up animal spirits before the mid terms this fall. In the end, though, it's creating just another mis-allocation of capital. That's what .govs are good at.

Looks like the Fed's VIX short is still on today. Everything green but VIX.

so what about the credit squeeze, CC rates, adjustable mortgages.

Even Sub Prime is resurrected,,,rebranded as No Prime. Magic is in the air, everywhere.

Even Crypto-Crowdfunding is in. This tree's going to the sky, then to Mars. Speak Easys, Bathtub Gin.

Year-to-date new car registrations in the US are running at the 1989 level.

March Auto sales deceptive as there was an additional selling weekend compared to last year. However, stock market gyrations have hammered me luxury car sales alreadt

Port traffic for last quarter is at it's highest ever for the Port of Long beach. Now we have record traffic in Intermodal rail and Port. Economy is on fire and people bitch. Dow theory is in full swing. Look for a shakeout then higher in Equities.

I saw this post and was wondering what kind of goods are sold via wholesalers versus via manufacturer directly to retailer and then to the end user. Certainly not automobiles, these are sold direct from manufacturer to retailers and large fleet customers. How much stuff does Costco, Amazon, Walmart, Kroger, Target, etc. buy through a wholesaler versus direct from the manufacturer? So, I took a quick look at the data and found to my surprise that the reported sales by wholesalers is consistently larger than the reported retail sales. So I am having a hard time understanding what this wholesaler data includes. Do any readers out there have a clue?

So, after thousands of stores closed the past year, retail sales are actually up from 2017? Interesting, which means sales per store must have skyrocketed, yet that's not what my data shows. So.....