| Consensus | Consensus Range | Actual | Previous | Revised | |
|---|---|---|---|---|---|
| Month over Month | 0.2% | 0.0% to 0.3% | 0.1% | 0.1% | 0.0% |
| Manufacturing Inventories | -0.1% | -0.2% | -0.3% | ||
| Retail Inventories | 0.2% | 0.9% | 0.7% | ||
| Wholesale Inventories | 0.2% | -0.2% |
Highlights
U.S. business inventories up 0.1 percent in October, after no change in September (previously +0.1 percent), and lower than the 0.2 percent increase expected in the Econoday survey of forecasters. Business inventories are 2.4 percent higher compared to October 2023.
Business sales were flat in October, after rising 0.3 percent in the prior month, and were up 1.7 percent from the same month last year.
Manufacturers' sales contracted by 0.2 percent while their inventories shrank by 0.1 percent. Retailers' sales were up 0.4 percent vs. a 0.2 percent rise in inventories, and wholesalers' 0.1 percent decline in sales was outpaced by a 0.2 percent increase in inventory.
The total business inventories/sales ratio at the end of October was 1.37, compared to 1.37 in September, and 1.36 in October 2023.
Business sales were flat in October, after rising 0.3 percent in the prior month, and were up 1.7 percent from the same month last year.
Manufacturers' sales contracted by 0.2 percent while their inventories shrank by 0.1 percent. Retailers' sales were up 0.4 percent vs. a 0.2 percent rise in inventories, and wholesalers' 0.1 percent decline in sales was outpaced by a 0.2 percent increase in inventory.
The total business inventories/sales ratio at the end of October was 1.37, compared to 1.37 in September, and 1.36 in October 2023.
Market Consensus Before Announcement
Inventories are expected up 0.2 percent on the month.
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.
