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US: Wholesale Inventories (Preliminary)
| Actual | Previous | Revised | |
| Month over Month | -0.5% | 0.2% | -0.1% |
Highlights
Wholesale inventories come in very weak, down an unusually large 0.5 percent in January for December, and after a revised 0.1 percent in December from November versus the previously reported increase of 0.2 percent for December.
Durable goods wholesale inventories are flat on the month in January from December and up 0.2 percent on month. Nondurables is the big mover, down 1.5 percent in January and 0.8 percent in December on month. Drugs, apparel, and alcohol all dropped more than 3 percent on the month in January.
On the wholesale sales side, sales are up 0.5 percent in January from December and up 1.3 percent in December from November. Durable goods sales are up 1.0 percent on the month and nondurables are flat.
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.