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US: Wholesale Inventories (Preliminary)
| Consensus | Consensus Range | Actual | Previous | Revised | |
| Month over Month | 0.1% | -0.2% to 0.2% | 0.5% | 0.0% | -0.1% |
Highlights
Wholesale inventories surprise to the upside with an unusually large rise of 0.5 percent in September from August versus the 0.1 percent increase expected in the Econoday consensus. Wholesale inventories for August were revised to show a decrease of 0.1 percent versus the flat reading previously reported. Wholesale inventories are up 1.8 percent in September from the year-ago month.
On a month to month basis, durable goods inventories rise 0.3 percent while nondurables jump by 0.7 percent in September from August. The biggest mover for nondurables is drugs, up 1.9 percent on the month, and petroleum, up 1.1 percent. On the durables side, electrical is up 2.4 percent and computer equipment up 4.1 percent. Autos, which tend to be a factor, are flat.
Market Consensus Before Announcement
Inventories expected up 0.1 percent.
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.