by Mish

That’s not the worst of it. January was revised from +0.3% to -0.2%

From the perspective of the original January report, wholesale inventories were down 1%. That’s a crash.

Sales are no better.

The Bloomberg Econoday wholesale consensus estimate for inventories was -0.2% in a range of -0.6% to +0.4%.

I congratulate the economist who was actually thinking, while wondering which one predicted +0.4%.

Wholesalers aggressively drew down their inventories in February, 0.5 percent lower following a revised 0.2 percent draw in January. Auto inventories were worked sharply lower in February, down 1.0 percent for the largest monthly decline since September 2013.
Sales in the wholesale sector fell 0.2 percent in the month for a 4th straight decline in a string that offers clear evidence of economic weakness. Yet the decline for inventories was greater than that for sales, making for an improvement in the stock-to-sales ratio which fell to a less heavy 1.36 from 1.37.
Auto sales have been struggling this year and the decline in wholesale auto inventories could be an early sign of correction for this industry. Still, draws are always welcome news when demand is soft. Note that today’s inventory decline and downward revision are negatives for first-quarter GDP estimates.
Recent History
Wholesale inventories have been rising only marginally but have still been well ahead of wholesale sales which have been falling. The stock-to-sales ratio in January rose two notches to 1.35 from 1.33 for the highest reading of the recovery, since April 2009. Forecasters see wholesale inventories turning lower in the February report, down a consensus 0.2 percent.

Inventory-to-Sales Improvement in Pictures


Inquiring minds no doubt wish to see what the wholesale inventor-to-sales improvement looks like.


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Wholesale sales were an absolute disaster. That explain the insignificant but “welcome” improvement in the inventory-to-sales ratio above.

Sales Highlights

  • Year-over-year sales -3.1%
  • Year-over-year automotive +1.2%
  • Year-over-year nondurables -6.2%, largely reflective of petroleum
  • December-January Automotive -2.2%
  • January-February Automotive -0.3%

I have been saying for quite some time as soon as autos roll over, a recession hits. Is this it?

Mike “Mish” Shedlock

Wholesale and Retail Inventories Rise

Census bureau reports show wholesale and retail inventories jumped in November.

Inventories Bounce, Led by Autos: Inventories Adding To GDP?

Adding to silly Commerce Department reporting of “auto sales”, today we learn business inventories were up 0.3%, led by autos up 1.1%. The rise in inventories matched the Econoday consensus estimate.

Wholesale and Retail Inventories Rise Led by Autos: Diving Into Seasonal Adjustments

On Monday, Census Department data showed durable-goods orders declined 1.1% for the month.

Wholesale Trade Inventories Decline; Revisions Announced; First Quarter GDP Troubles Brewing

According to the Census Department’s Monthly Wholesale Trade Report, inventories declined 0.2% in January.

Wholesale Inventories Rose 0.3 Percent in September: Unwarranted Inventory Build?

The Census Bureau reported wholesale trade inventories rose 0.3 percent in September. This was an expected result given the Census Bureau's advance estimates.

Wholesale Sales -0.5% Inventories +0.4%

Perhaps there will be an inventory build for the quarter after all because the build in wholesale inventories is not matched by reported sales.

Wholesale Inventories Up 0.4 Percent: Spotlight on Autos

Wholesale inventories were up 0.4% in December vs expectations of a 0.2% rise. Revisions knocked November lower.

Wholesale Inventories Flat, Inventory-to-Sales Ratio Shows Hurricane Impacts

The Census Bureau reported wholesale inventories were flat in October. The bureau revised September from +0.7% to +0.6%. Hurricane impacts distorted the numbers, as well as mainstream media analysis of the numbers.

Auto Inventories Surge: How’s That Going to Work?

Wholesale inventories in March rose 0.2% as expected by the Econoday consensus. February was revised from 0.4% to 0.3 which will take a tick off GDP first-quarter revisions.