Big Drop in Wholesale Inventories as Sales Surge
ThinkstockWholesale inventories and sales should be a relevant economic reading, but the one month lag can mute the reaction to the news. The Commerce Department reported that wholesale inventories were down 0.3% and sales were up by 1.7% for the…
Wholesale inventories and sales should be a relevant economic reading, but the one month lag can mute the reaction to the news. The Commerce Department reported that wholesale inventories were down 0.3% and sales were up by 1.7% for the month of February.
As far as consensus estimates on inventories, Bloomberg was looking for a gain of 0.5% while Dow Jones was pegging the estimate for a gain at 0.6%. Today’s February report was worse than every single economist polled, as Bloomberg’s range was for a gain of 0.2% to 1.4%.
It is important to understand that wholesalers account for about one-third of all inventories. The report is seasonally adjusted and came to $501.36 billion in inventories. That was the largest decline in about 18 months. The seasonally adjusted sales came to $422.5 billion, and the gain came from petroleum, nondurables and computer equipment.
This number matters when it is grossly off the mark. That being said, here is a copy from the Census Bureau showing the long-term graph, and it includes the impact and imbalances from during and before the Great Recession.
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Jon Ogg has been a financial news analyst since 1997. Mr. Ogg set up one of the first audio squawk box services for traders called TTN, which he sold in 2003. He has previously worked as a licensed broker to some of the top U.S. and E.U. financial institutions, managed capital, and has raised private capital at the seed and venture stage. He has lived in Copenhagen, Denmark, as well as New York and Chicago, and he now lives in Houston, Texas. Jon received a Bachelor of Business Administration in finance at University of Houston in 1992. www.247wallst.com.
