Surprise Inventory Build Threatens Fourth-Quarter Outlook
Sales from merchant wholesalers increased 1 percent on the month to $435.3 billion in October and are now up 6.4 percent on the year, according to the latest Monthly Wholesale Trade report, which was released by the U.S. Census Bureau on December 10.
Sales of durable goods were “virtually unchanged” on the month but are up 7.5 percent on the year. Sales of nondurable goods increased 1.8 percent on the month, buoyed by a 3.6 percent increase in the sale of petroleum and petroleum products, and are up 5.5 percent on the year.
Wholesale inventories increased 1.4 percent on the month to $514.1 billion, up 3.3 percent on the year. This is due to a 0.4 percent increase in durable goods inventories (motor vehicle parts are up 2.7 percent on the month; software and electrics inventories fell 5.7 percent) and a 3 percent increase in nondurable goods inventories. Inventories of farm product raw materials were up 17 percent on the month.
Although inventories climbed faster than sales, the inventory-to-sales ratio remained effectively unchanged at 1.18, up slightly from earlier in the third quarter and down from 1.22 in October 2012.