The headlines say wholesale sales improved year-over-year with inventory levels remaining at levels associated with recessions. The best way to look at this series may be the unadjusted data three month rolling averages which decelerated keeping the long term downtrend in play.

Note that Econintersect analysis is year-over-year – the analysis is based on the change from one year ago. Econintersect Analysis:

  • unadjusted sales rate of growth accelerated 1.2 % month-over-month.
  • unadjusted sales year-over-year growth is down 3.6 % year-over-year
  • unadjusted sales (but inflation adjusted) down 6.0 % year-over-year
  • the 3 month rolling average of unadjusted sales decelerated 1.1 % month-over-month, and down 4.3 % year-over-year. There has been a general deceleration trend since late 2014.

    • Year-over-Year Sales – Unadjusted (blue line), Unadjusted but Inflation Adjusted (red line), 3 month Rolling Averages (yellow line)

    z%20wholesale1.PNG

  • unadjusted inventories up 4.5 % year-over-year (acceleration of 0.3 % month-over-month), inventory-to-sales ratio is 1.27 which is historically is at recessionary levels (but with deflation in this sector this ratio is not operative)..

    • US Census Headlines based on seasonally adjusted data:

  • sales up 0.5 % month-over-month, down 4.7% (last month was reported down 3.9 %) year-over-year
  • inventories up 0.5 % month-over-month, inventory-to-sales ratios were 1.20 one year ago – and are now 1.31.
  • the market (from Bloomberg) expected inventory month-over-month change between 0.0 % to 0.3 % (consensus 0.1 %) versus the +0.5 % reported.

    • Wholesale Sales – Unadjusted – $ Millions

    wholesale_2005on.PNG

    Wholesale sales were at record highs for almost two years – until 2015 where they contracted year-over-year (and the contraction continues). Overall, the inventory-to-sales ratios (a rising ratio is an indicator of economic slowing) was abnormally high relative to past Septembers.

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