4/9/2015
By Jennifer Coombs

Wholesale inventories relative to sales remain quite bloated for the second month in a row, up 0.3% versus a decline of 0.2% in wholesale sales in February. This discrepancy keeps the inventory-to-sales ratio unchanged at a whopping 1.29, which is the highest reading since the recession in June 2009. The prior month’s revisions were also unfavorable, with the inventory build revised a tenth higher to +0.4% and sales revised lower to -3.6% from an initial reading of -3.1%. January primarily showed a massive downswing in petroleum-related products, which made it the worst month for wholesale sales since the peak of the recession in March 2009.

Multiple sectors caused the drop, with electrical goods, machinery, metals, and automobiles all pulling February’s number down. This ultimately points to weakness in the industrial economy, most likely because of the drop in exports. The wholesale sector, between manufacturing and retailing, shows that there is weakness in demand on the retail end and slowing production on the manufacturing side. All of these components point to a slowdown in employment growth and ultimately do not point to any positive signs for the retail sales numbers out next week.

Jennifer Coombs
Wall Street Strategies

Add a Comment!