| Consensus | Consensus Range | Actual | Previous | Revised | |
|---|---|---|---|---|---|
| Month over Month | 0.0% | -0.3% to 0.4% | -0.1% | 0.2% | 0.0% |
Highlights
Total business inventories are down 0.1 percent in March from February and unchanged in February from January. The decrease is close to the consensus of unchanged in the Econoday survey. Overall, the change in inventories points to minimal revisions for the dollar value of the contribution from the change in private inventories in the second estimate of first quarter GDP when the report is released at 8:30 ET on Thursday, April 25.
Business inventories are down 0.8 percent for manufacturing in March from February. Wholesale inventories are flat month-over-month while retail inventories are up 0.7 percent.
The inventory to sales ratio for March is at 1.39, little changed from 1.38 in February.
Business inventories are down 0.8 percent for manufacturing in March from February. Wholesale inventories are flat month-over-month while retail inventories are up 0.7 percent.
The inventory to sales ratio for March is at 1.39, little changed from 1.38 in February.
Market Consensus Before Announcement
Business inventories in March are expected to stall, remaining unchanged following a 0.2 percent build in February.
Definition
Business inventories are the dollar amount of inventories held by manufacturers, wholesalers, and retailers. The level of inventories in relation to sales is an important indicator of the near-term direction of production activity.
Description
Investors need to monitor the economy closely because it usually dictates how various types of investments will perform. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers more moderate growth that won't generate inflationary pressures.
Rising inventories can be an indication of business optimism that sales will be growing in the coming months. By looking at the ratio of inventories to sales, investors can see whether production demands will expand or contract in the near future. For example, if inventory growth lags sales growth, then manufacturers will have to boost production lest commodity shortages occur. On the other hand, if unintended inventory accumulation occurs (that is, sales do not meet expectations), then production will probably have to slow while those inventories are worked down. In this manner, the business inventory data provide a valuable forward-looking tool for tracking the economy.
Rising inventories can be an indication of business optimism that sales will be growing in the coming months. By looking at the ratio of inventories to sales, investors can see whether production demands will expand or contract in the near future. For example, if inventory growth lags sales growth, then manufacturers will have to boost production lest commodity shortages occur. On the other hand, if unintended inventory accumulation occurs (that is, sales do not meet expectations), then production will probably have to slow while those inventories are worked down. In this manner, the business inventory data provide a valuable forward-looking tool for tracking the economy.
