Wholesale Inventories Rose in June
The U.S. Census Bureau announced that wholesale sales and inventories both rose by 0.6 percent between May and June (all percentages are seasonally adjusted at annual rates of growth). Wholesale durable goods sales rose in June by 1.6 percent, reversing the 0.5 percent decline in May. This increase in sales was led by the automotive sector, which was up 8.7 percent. This is a strong signal that motor vehicle sales are starting to recover from the supply chain disruptions of the spring.
Nondurable goods sales, though, fell by 0.2 percent, but were still up nearly 20 percent year-over-year. Aside from automobiles, other sectors with sales increases included alcohol (up 4.0 percent), chemicals (up 2.3 percent), machinery (up 2.1 percent) and groceries (up 1.8 percent). The largest declines in sales came from the petroleum sector (down 2.9 percent), reflecting lower energy prices.
Wholesale inventories mirrored the sales figures for the most part, with durable goods inventories up 1.3 percent for the month and 12.1 percent for the year. Wholesale nondurable goods inventories were off 0.4 percent in June, but they were 21.4 percent higher than this time last year. The sectors with the strongest inventory gains were automotive (up 4.3 percent), computer equipment (up 3.5 percent), metals (up 2.6 percent), apparel (up 2.4 percent) and chemicals (up 2.2 percent).
The inventory-to-sales ratio remained unchanged at 1.16. This measures how many months it would take to deplete current inventories at the current rate of sales. The rates for durable and nondurable goods in June were 1.52 and 0.87, respectively.