The headlines say wholesale sales were up month-over-month with inventory levels up slightly and remaining at levels associated with recessions. Our analysis shows some improvement of the 3 month averages, and the three month averages are in expansion.

Analyst Opinion of this month’s Wholesale Sales

We continue to be mystified in the wobble in this data set – there is something wrong with either data collection or methodology. The headlines said this sector improved this month. The big growth this month came from petroleum and electrical. Overally, I believe the rolling averages tell the real story – and they improved this month.

Inventories remain at elevated levels – note that they declined from last year’s level.

To add to the confusion, year-over-year employment changes and sales growth do not match. This adds to me belief that the wholesale trade data set is flawed and must be ignored if one wants to get a feel of what is happening in the economy.

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

  • unadjusted sales rate of growth decelerated % month-over-month.
  • unadjusted sales year-over-year growth is down 0.8 % year-over-year (it was +0.5 % last month)
  • unadjusted sales (but inflation adjusted) down 0.5 % year-over-year
  • the 3 month rolling average of unadjusted sales accelerated 2.0 % month-over-month, and up 2.2 % year-over-year.

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

    z%20wholesale1.PNG

  • unadjusted inventories declined 0.4 % year-over-year (down 0.3 % month-over-month), inventory-to-sales ratio is 1.29 which historically is well above recessionary levels.

    • US Census Headlines based on seasonally adjusted data:

  • sales up 1.4 % month-over-month, up 2.2 % (last month was reported up 0.6 %) year-over-year
  • inventories down 0.4 % month-over-month, inventory-to-sales ratios were 1.33 one year ago – and are now 1.30.
  • Expectations for inventory growth from Bloomberg / Econoday were between -0.4 % to 0.3 % (consensus -0.4 %) vs. the actual at -0.4 %
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