–Sales Drop First Since March 2009; Inventory/Sales Rise To 1.24
By Kevin Kastner
WASHINGTON (MNI) – The value of business inventories rose in May
for the fifth straight month, while business sales fell for the first
time since March 2009, data released Wednesday morning by the Commerce
Department showed.
The 0.1% rise in business inventories was smaller than the 0.3%
gain expected. Retail inventories rose 0.3% in the month on widespread
gains. Factory inventories were already reported down 0.4% for the
month, while wholesale inventories rose 0.5%.
Business sales fell 0.9% in May, the first drop since March 2009.
Sales are still up solidly from year ago, running 11.6% ahead of their
May 2009 pace before seasonal adjustment and 11.8% after seasonal
adjustment.
In contrast, inventories are 1.4% below their year-ago levels
before seasonal adjustment and down 1.5% after seasonal adjustment.
The inventory-to-sales ratio rose slightly to 1.24 in May from the
record low 1.23 ratio in April, but remained well below the 1.41 ratio
in May 2009. The data, especially the inventory/sales ratio, still
suggest that businesses are cautiously holding the line against
overstocking despite clear signs of sales improvement.
Retail auto inventories posted a 0.4% gain in May after falling
0.4% in April. Even excluding that gain, retail inventories would have
still been up 0.3% in May and total business inventories would have
still been up 0.1%, based on a Market News International calculation.
The remaining retail components showed solid inventory gains in
every category in May except food and beverage stores, which fell 0.1%
** Market News International Washington Bureau: 202-371-2121 **
[TOPICS: MAUDS$,MT$$$$,M$U$$$,MAUDR$]
