| Consensus | Consensus Range | Actual | Previous | Revised | |
|---|---|---|---|---|---|
| Month over Month | -0.5% | -0.5% to -0.5% | -0.5% | -0.2% | -0.1% |
Highlights
Wholesale inventories fell 0.5 percent in the second estimate for December from November, unrevised from the first estimate, in line with expectations. November was revised to show a decline of 0.1 percent from October, compared with the decrease of 0.2 percent reported previously.
Wholesale inventories fell 0.1 percent from a year ago. The wholesale inventory-sales ratio was at 1.31 in December versus 1.33 in November and 1.35 in December a year ago.
December details, month on month, show a 0.6 percent decrease for durable goods, led by a 0.6 percent drop in automotive, a 0.7 percent decline in lumber, and a 1.6 percent decline in electrical equipment, offset by a 0.6 percent increase in computer equipment and 0.5 percent rise in metals. There was a 0.2 percent decrease for nondurable goods, led by 1.7 percent declines in groceries and apparel, offset by petroleum up 8.1 percent, farm products up 2.2 percent and paper, up 1.2 percent.
Wholesale inventories fell 0.1 percent from a year ago. The wholesale inventory-sales ratio was at 1.31 in December versus 1.33 in November and 1.35 in December a year ago.
December details, month on month, show a 0.6 percent decrease for durable goods, led by a 0.6 percent drop in automotive, a 0.7 percent decline in lumber, and a 1.6 percent decline in electrical equipment, offset by a 0.6 percent increase in computer equipment and 0.5 percent rise in metals. There was a 0.2 percent decrease for nondurable goods, led by 1.7 percent declines in groceries and apparel, offset by petroleum up 8.1 percent, farm products up 2.2 percent and paper, up 1.2 percent.
Market Consensus Before Announcement
Forecasters expect no revision in the minus 0.5 percent figure from the flash report.
Definition
Wholesale trade measures the dollar value of sales made and inventories held by merchant wholesalers. It is a component of business sales and inventories.
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 a slower rate of growth that won't lead to inflationary pressures. Wholesale sales and inventory data give investors a chance to look below the surface of the visible consumer economy. Activity at the wholesale level can be a precursor for consumer trends. In particular, by looking at the ratio of inventories to sales, investors can see how fast production will grow in coming months. For example, if inventory growth lags sales growth, then manufacturers will need to boost production lest product shortages occur. On the other hand, if unintended inventory accumulation occurs (i.e. sales did not meet expectations), then production will probably have to slow while those inventories are worked down. In this manner, the inventory data provide a valuable forward-looking tool for tracking the economy.
