Wholesale Inventories Keep Rising
The U.S. Census Bureau's reading on wholesale trade in the month of January 2016 showed an increase in inventory levels.
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The U.S. Census Bureau’s reading on wholesale trade in the month of January 2016 showed an increase in inventory levels. This is a trend we have seen confirmed in other economic reports of late, and it was the inventories growth that abnormally increased a fourth-quarter 2016 gross domestic product report.
Sales of merchant wholesalers were listed as $433.1 billion, which is down 1.3% from the revised December level, and were down 3.1% from the January 2015 level. The December preliminary estimate was revised downward $1.0 billion, or 0.2%. January sales of durable goods were down by 1.9% from last month and were down by 3.4% from the prior year’s report.
Sales of computer and computer peripheral equipment and software were down by a sharp 6.4%. The sales of furniture and home furnishings were down by 5.3%. Sales of petroleum and petroleum products were down 6.9% from last month.
Sales of nondurable goods were down by some 0.8% from December and were down 2.8% from last January.
The total inventories of merchant wholesalers were $584.2 billion at the end of January. This was up by 0.3% from the revised December level and up 2.0% from the January 2015 level. That 0.3% gain in the monthly reading compares to a Bloomberg consensus estimate of -0.1%. In short, the growth of inventories continues on the monthly readings — and is even greater if you compare it to a year earlier.
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The December preliminary estimate was revised upward $0.6 billion, or 0.1%. January inventories of durable goods were down 0.3% from last month and down 0.4% from a year ago.
Inventories of electrical and electronic goods were down by some 3.6%, while inventories of motor vehicle and motor vehicle parts and supplies rose by 1.5%
Inventories of nondurable goods were up 1.1% from December and up 5.9% from January of 2015.
Inventories of paper and paper products were up 4.2% from last month, and inventories of drugs and druggists goods rose by 3.3%.
The so-called inventories to sales ratio was 1.35, up from the January 2015 ratio of 1.28.
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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.
