Wholesale inventories came in at a consensus 0.2 percent increase led by a sharp build in autos, excluding which March inventories were unchanged. Sales in the wholesale sector were unchanged in the month though the mismatch with the inventory build does not lift the stock-to-sales ratio which holds at a healthy 1.28. These results will not upset expectations for an incremental 0.1 percent rise in Friday’s business inventories report. Inventories have been moving higher gradually, largely in line with underlying demand.
Inventories vs Sales
The above chart from the Census report Monthly Wholesale Trade: Sales and Inventories March 2017.
The idea that inventories are healthy given poor retail sales reports is more than a bit questionable. A disaster awaits autos.
- April 3: Auto Sales Final Numbers: Down 5.7%, Two-Year Low; Don’t Worry, It’s Just a Plateau!
- May 1: Three Big Red Flags for Auto Sales
- May 2: Auto Sales Puke Again: Year-Over-Year Totals: GM -6%, Ford -7.2%, Toyota -4.4%, Fiat-Chrysler -7.0%
Mike “Mish” Shedlock