econintersect.com
       
  

FREE NEWSLETTER: Econintersect sends a nightly newsletter highlighting news events of the day, and providing a summary of new articles posted on the website. Econintersect will not sell or pass your email address to others per our privacy policy. You can cancel this subscription at any time by selecting the unsubscribing link in the footer of each email.



posted on 08 May 2015

March 2015 Wholesale Sales and Inventory Data Continues to be Bad.

Written by Steven Hansen

The headlines say wholesale sales contracted year-over-year and inventory remains at levels associated with recessions. This data series is very noisy. Because of this noise, the best way to look at this series may be the unadjusted data three month rolling averages which decelerated for the eighth month in a row. This was another soft report.

Note that Econintersect analysis is year-over-year - the analysis is based on the change from one year ago. Econintersect Analysis:

  • unadjusted sales rate of growth accelerated 1.1% month-over-month (last month was a revised +1.0%) - less bad growth contraction.
  • unadjusted sales year-over-year growth is down 1.3% year-over-year
  • unadjusted sales (but inflation adjusted) down 3.2% year-over-year
  • the 3 month rolling average of unadjusted sales decelerated 1.9% month-over-month, and down 2.3% year-over-year .

Year-over-Year Sales - Unadjusted (blue line), Unadjusted but Inflation Adjusted (red line), 3 month Rolling Averages (yellow line)

z%20wholesale1.PNG

  • unadjusted inventories up 4.9% year-over-year (decelerated 1.0% month-over-month), inventory-to-sales ratio is 1.45 which is historically is well above non-recessionary periods for Februarys.

US Census Headlines based on seasonally adjusted data:

  • sales down 0.2% month-over-month, down 4.0% (last month was reported down 1.5%) year-over-year
  • inventories up 0.1% month-over-month, inventory-to-sales ratios were 1.19 one year ago - and are now 1.30.
  • the market expected inventory month-over-month change between +0.3% to +0.5% (consensus 0.3%) versus the -0.2% reported.

Year-over-Year Growth - Wholesale Sales - Unadjusted data (blue line), Inflation Adjusted Data (red line)

The short term year-over-year trend for sales is now decelerating.

Wholesale Sales - Unadjusted - $ Millions

wholesale_2005on.PNG

Wholesale sales have now been at record highs for almost two years - until last month where they contracted year-over-year (and the contraction continues). Overall, the inventory-to-sales ratios (a rising ratio is an indicator of economic slowing) was abnormally high relative to past Marchs.

Unadjusted Inventory-to-Sales Ratio (blue line) Year-over-Year Change

Year-over-year change in the inventory-to-sales ratio is what is important. A jump in the ratio which could indicate a slowing economy (one month of data is not a trend). A flat trend would indicate an economy which was neither accelerating or decelerating. A decelerating trend would indicate an improving economy.

Caveats on the Use of this Index

The data in this index continues to be revised up to 3 months following initial reporting. The revision usually is not significant enough to change the interpretation of each month's data in real time. Generally there are also annual revisions to this data series.

The methodology used by US Census to seasonally adjust the data is not providing a realistic understanding of the month-to-month movements of the data. One reason is that US Census uses data over multiple years which includes the largest modern recession which likely distorts the analysis. Further, Econintersect believes there has been a fundamental shift in seasonality in the aftermath of the Great Recession of 2007 - the New Normal.

Econintersect determines the month-over-month change by subtracting the current month's year-over-year change from the previous month's year-over-year change. This is the best of the bad options available to determine month-over-month trends - as the preferred methodology would be to use multi-year data (but the New Normal effects and the Great Recession distort historical data).

This series is NOT inflation adjusted. To make this adjustment Econintersect uses the PPI - subindex Total Wholesale AWHLTRAWHLTR.

As economic indicators go, wholesale sales and inventories are poor at spotting economic problems. Wholesale data did not start contracting during the Great Recession until October 2008. The only portion of wholesale trade data which seems to correspond to general economic conditions is wholesale trade employment.

All Employees - Wholesale

Related Posts:

Old Analysis Blog

New Analysis Blog

All Retail and Business Posts All Retail and Business Posts
All Manufacturing Posts All Manufacturing Posts


>>>>> Scroll down to view and make comments <<<<<<



Permanent link to most recent post on this topic

Click here for Historical Releases Listing










Make a Comment

Econintersect wants your comments, data and opinion on the articles posted. You can also comment using Facebook directly using he comment block below.






Econintersect Economic Releases


search_box

Print this page or create a PDF file of this page
Print Friendly and PDF


The growing use of ad blocking software is creating a shortfall in covering our fixed expenses. Please consider a donation to Econintersect to allow continuing output of quality and balanced financial and economic news and analysis.


Take a look at what is going on inside of Econintersect.com
Main Home
Analysis Blog
Slow Economic Growth Will Be Around For A Long Time
The Job Guarantee, Wage-Price Inflation And Alternative Solutions: Part 2
News Blog
Case-Shiller 20 City Home Price Index January 2017 Shows 5.7 % Year-over-Year Growth
A Changing Rulebook To Tame The New Global Arms Race
Infographic Of The Day: Chart: Understanding Alphabet's 4 Billion Dollar In "Other Bets"
Early Headlines: Asia Stocks And Dollar Up, Oil, Gold Steady, Obama Climate Policies Gone, US Oil Glut, Euro Surges, Shorts Remain, Trump Into Yemen?, Iran-Russia Deals, Cat 4 Cyclone Hits Oz, And More
March 27, 2017 Weather and Climate Report - Will the MJO Deliver a Nino?
The Most Reputable Companies Worldwide
Gut Bacteria Play A Role In Long-term Weight Gain
What We Read Today 27 March 2017 - Special Public Edition
Is Less More In The Smartphone Market
Average Gasoline Prices for Week Ending 27 March 2017 Statistically Unchanged - Again
What We Read Today 27 March 2017
Why New Jets Could Destroy Airlines
March 2017 Texas Manufacturing Survey Continues to Expand
Investing Blog
The Dollar's Coming Impact On Markets
The Real 401k Plan Manager 27 March 2017
Opinion Blog
Macron May Lead But Le Pen Remains The Big Story
Is The 20th Century Still The 'Hayek Century'?
Precious Metals Blog
These Gold Stocks Will Produce Much Bigger Gains Than Gold Itself
Live Markets
28Mar2017 Pre-Market Commentary: Wall Street Eyes A Lower Opening, Crude Prices Edge Higher, Investors Await Fed Members Clues On Timing Of Next Rate Hike
Amazon Books & More






.... and keep up with economic news using our dynamic economic newspapers with the largest international coverage on the internet
Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government































 navigate econintersect.com

Blogs

Analysis Blog
News Blog
Investing Blog
Opinion Blog
Precious Metals Blog
Markets Blog
Video of the Day
Weather

Newspapers

Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government
     

RSS Feeds / Social Media

Combined Econintersect Feed
Google+
Facebook
Twitter
Digg

Free Newsletter

Marketplace - Books & More

Economic Forecast

Content Contribution

Contact

About

  Top Economics Site

Investing.com Contributor TalkMarkets Contributor Finance Blogs Free PageRank Checker Active Search Results Google+

This Web Page by Steven Hansen ---- Copyright 2010 - 2017 Econintersect LLC - all rights reserved