–Excluding Autos, Wholesale Inventories Up 0.7%, Sales Down 0.2%

By Kevin Kastner

WASHINGTON (MNI) – The value of wholesale inventories rose 0.7% in
July, while sales fell 0.1%, a third straight decline, data released
Wednesday morning by the Commerce Department showed.

As a result of this month’s inventories rise and sales decline, the
overall inventory-to-sales ratio rose to 1.21 from 1.20 in June 2012 and
was up from 1.18 in July 2011. The July ratio was the highest since a
matching 1.21 in November 2009.

The value of durable inventories rose 0.7% in the month, as auto
inventories rose 0.4%. The remaining durables components were generally
higher, with the exception of declines in inventories of metals,
electrical, and hardware items.

Nondurables inventories also rose 0.7%, with mixed movements in the
component categories. Petroleum inventories fell 0.7%, likely due to
lower prices.

Durables goods sales fell 0.8%, led by a 2.3% drop in professional
equipment sales and a 3.1% decline in sales of miscellaneous durable
goods. Auto sales rose 0.8% in the month.

Nondurable goods sales rose 0.5%, but petroleum goods sales fell
2.0%. The remaining component were generally higher, though apparel
sales and alcohol sales both declined.

Excluding the auto category, wholesale inventories would still have
been up 0.7% in July after a 0.1% decline in the previous month, an MNI
calculation showed. Sales would have been down 0.2% in July if auto
sales were excluded. This followed a 1.7% drop in June.

Before seasonal adjustment, total wholesale inventories rose 5.4%
from July 2011, the same as the year/year increase in unadjusted sales.

Factory inventories rose 0.5% in July, based on data already
released, so the outlook for business inventory growth appears to be for
continued positive growth pending the retail inventories data when they
are released.

** MNI Washington Bureau: 202-371-2121 **