Updated: 12-Mar-10 10:32 ET
| January Business Inventories |
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| Updated: 12-Mar-10 10:32 ET |
Highlights
- Business inventories posted no growth in January after falling 0.3% in December.
- The consensus expected an increase of 0.1%.
- Total business sales increased 0.6% in January.
- The inventory/sales ratio declined from 1.26 to 1.25, and is currently below the long-term average set prior to the start of the recession.
Key Factors
- Inventory growth for both manufacturers (0.2%) and merchant wholesalers (-0.2%) were known prior to the release. The only new piece of information was that retailer inventories declined 0.1% in January.
- The lack of sustainable inventory growth over the last two months should not necessarily lower 2010 GDP forecasts. Inventories move in cycles and growth should return in the next few months as consumer demand stabilizes.
Big Picture
- Business inventories include wholesale inventories, manufacturing inventories, and retail inventories. Inventories are a component of GDP, and thus are of interest to economists, but the financial markets don't pay much attention to this release. Over the long term, the inventory-to-sales ratio has been declining, due to improving techniques for inventory management. Inventories are likely to decline over the near term to bring inventory-to-sales ratios back into line with company desires. Inventories will rise once sales pick up.
| Category | JAN | DEC | NOV | OCT | SEP |
| Inventories | 0.0% | -0.3% | 0.5% | 0.4% | -0.5% |
| Manufacturers | 0.2% | -0.2% | 0.2% | 0.4% | -1.3% |
| Retailers | -0.1% | 0.2% | -0.2% | 0.0% | 0.5% |
| Wholesalers | -0.2% | 1.0% | 1.6% | 0.6% | -0.8% |
| Sales | 0.6% | 1.0% | 2.4% | 1.4% | 0.2% |
| Manufacturers | 0.3% | 1.8% | 1.6% | 1.5% | 1.3% |
| Retailers | 0.2% | -0.2% | 2.1% | 1.3% | -2.2% |
| Wholesalers | 1.3% | 1.2% | 3.6% | 1.4% | 1.3% |
| Inventory/Sales | 1.25% | 1.26% | 1.27% | 1.30% | 1.31% |
| Manufacturers | 1.29% | 1.29% | 1.32% | 1.34% | 1.35% |
| Retailers | 1.37% | 1.37% | 1.37% | 1.40% | 1.42% |
| Wholesalers | 1.10% | 1.12% | 1.14% | 1.17% | 1.17% |
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