July 2015 Wholesale Sales Remain In Contraction

The headlines say wholesale sales slowed year-over-year with inventory levels remaining at levels associated with recessions (although inventories contracted month-over-month). The best way to look at this series may be the unadjusted data three month rolling averages which marginally decelerated keeping the long term downtrend in play. This report is not excellent.

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 decelerated 4.2% month-over-month.

unadjusted sales year-over-year growth is down 4.5% year-over-year

unadjusted sales (but inflation adjusted) down 5.8% year-over-year

the 3 month rolling average of unadjusted sales decelerated 0.3% month-over-month, and down 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 4.8% year-over-year (decelerated 0.5% month-over-month), inventory-to-sales ratio is 1.27 which is historically is at recessionary levels.

US Census Headlines based on seasonally adjusted data:

sales down 0.3% month-over-month, down 4.2% (last month was reported down 3.8%) year-over-year

inventories down 0.1% month-over-month, inventory-to-sales ratios were 1.19 one year ago – and are now 1.30.

the market (from Bloomberg) expected inventory month-over-month change between 0.1 % to 1.3 % (consensus 0.3 %) versus the -0.1 % reported.

Wholesale Sales – Unadjusted – $ Millions

wholesale_2005on.PNG

Wholesale sales have now been 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 Julys.