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 13 November 2015

September 2015 Business Inventories Grow.

Written by Steven Hansen

Econintersect's analysis of final business sales data (retail plus wholesale plus manufacturing) shows unadjusted sales improved compared to the previous month - but there was a decline of the rolling averages. Even with inflation adjustments, business sales are in contraction. The inventory-to-sales ratios remain at recessionary levels.

Econintersect Analysis:

  • unadjusted sales rate of growth accelerated 0.7 % month-over-month, and down 2.7 % year-over-year
  • unadjusted sales (but inflation adjusted) down 0.8 % year-over-year
  • unadjusted sales three month rolling average compared to the rolling average 1 year ago decelerated 0.7 % month-over-month, and is down 3.0 % year-over-year.

Unadjusted Business Sales - Unadjusted (blue line), Unadjusted but Inflation Adjusted (red line), and 3 month rolling Average (yellow line)

  • unadjusted business inventories growth accelerated 0.1 % month-over-month (up 2.4 % year-over-year with the three month rolling averages decelerating), and the inventory-to-sales ratio is 1.4 which is at recessionary levels (well above average for this month). However, these ratios may be distorting the real picture as inventory values may not be properly revalued for inflation (first in, first out).

US Census Headlines:

  • seasonally adjusted sales unchanged month-over-month, down 2.8 % year-over-year (it was reported down 3.1 % last month).
  • seasonally adjusted inventories were up 0.3% month-over-month (up 2.5 % year-over-year), inventory-to-sales ratios were up from 1.31 one year ago - and are now 1.38.
  • market expectations (from Bloomberg) were for inventory growth of 0.0 % to 0.3 % (consensus 0.0 %) versus the actual of +0.3 %.

The way data is released, differences between the business releases pumped out by the U.S. Census Bureau are not easy to understand with a quick reading. The entire story does not come together until the Business Sales Report (this report) comes out. At this point, a coherent and complete business contribution to the economy can be understood.

Today, Econintersect analyzed advance retail sales for October 2015. This is final data from the Census Bureau for September 2015 for manufacturing, wholesale, and retail (see graphs below):

Year-over-Year Change Manufacturing New Orders - Unadjusted (blue line) and Inflation Adjusted (red line)

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


Please see caveats at the end of this post on the differences between Econintersect data analysis methodology and U.S. Census.

Business Sales - Unadjusted - $ millions

Sales were lower than last year.

Year-over-Year Change Business Sales - Unadjusted (blue line) and Inflation Adjusted (red line)

Using inflation adjustments, analysts can more clearly count the quantity of business transactions. Inflation adjusted data decelerated.

Many analysts pay particular attention to inventories in this report. Inventories, expressed as a ratio to sales. The current situation suggests the economy was contracting.

Seasonally Adjusted Business Inventories Year-over-Year Change - Inventory Value (blue line, left axis) and Inventory-to-Sales Ratio (red line, right axis)

The takeaway from the above graph is that overall inventories rate of growth is now declining. The above graph is the headline view of inventories. Econintersect uses unadjusted data to look at inventories. The graph below shows the growth or contraction of the inventory-to-sales ratio year-over-year. When the graph below is above zero, inventories are building faster than sales.

Unadjusted Inventory-to-Sales Year-over-Year Change

Caveats On Business Sales

This data release is based on more complete data than the individual releases of retail sales, wholesale sales and manufacturing sales. Backward revisions are slight - and it is unusual that the revisions would cause a different interpretation of a trend analysis.

The data in this series is not inflation adjusted by the Census Bureau - Econintersect adjusts using the appropriate BLS price indices relative to the three data series.

  • CPI less shelter for retail sales
  • PPI subindex OMFG for manufacturing
  • PPI subindex PCUAWHLTRAWHLTR for wholesale sales

As in most US Census reports, Econintersect questions the seasonal adjustment methodology used and provides an alternate analysis. The issue is that the exceptionally large recession and subsequent economic roller coaster has caused data distortions that become exaggerated when the seasonal adjustment methodology uses more than one year's data. Further, Econintersect believes there is a New Normal seasonality and using data prior to the end of the recession for seasonal analysis could provide the wrong conclusion.

>>>>> 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.  As the internet is a "war zone" of trolls, hackers and spammers - Econintersect must balance its defences against ease of commenting.  We have joined with Livefyre to manage our comment streams.

To comment, using Livefyre just click the "Sign In" button at the top-left corner of the comment box below. You can create a commenting account using your favorite social network such as Twitter, Facebook, Google+, LinkedIn or Open ID - or open a Livefyre account using your email address.

You can also comment using Facebook directly using he comment block below.

Econintersect Economic Releases


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
Main Home
Analysis Blog
Comments on Feyerabend’s ‘Against Method’, Part III
Federal Repression System
News Blog
Schiaparelli's Descent To Mars In Real Time
September 2016 Existing Home Sales Still Not Excellent
September 2016 Leading Economic Index Improves Indicating Moderate Growth Ahead.
October 2016 Philly Fed Manufacturing Survey Declines But Remains In Expansion.
15 October 2016 Initial Unemployment Claims: Rolling Averages Marginally Worsen
Infographic Of The Day: Real Estate Bubbles, The Six Cities At Risk Of Bursting
Tesla Is Playing The Long Game
Name Dropping, Clinton Likes To Mention Herself
The Ability To Enforce Mandatory Migrant Quotas Is Slipping Out Of The EU's Grasp
2016 Winners And Losers Against The Dollar
October 2016 Beige Book: Reading Between The Lines - The Rate Of Economic Expansion Marginally Improved
Clinton Vs. Trump: A Case Of The Lesser Of Two Evils
Inside The Post Office Railway
Investing Blog
The 401k Plan Manager 17 October 2016
How To Insure Your Stocks And Make The Stock Market Pay For It
Opinion Blog
Prop. 51 Versus A State-Owned Bank: How California Can Save $10 Billion On A $9 Billion Loan
Obama's Middle East Policy Has Been A Complete Failure - Or Has It?
Precious Metals Blog
Silver Prices Today Remain Volatile - What To Expect Now
Live Markets
20Oct2016 Market Update: Wall Street Exhibits Signs Of Investor Strain And Worry, Gold Falls And Stabilizes
Amazon Books & More

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

Crowdfunding ....



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


Asia / Pacific
Middle East / Africa
USA Government

RSS Feeds / Social Media

Combined Econintersect Feed

Free Newsletter

Marketplace - Books & More

Economic Forecast

Content Contribution



  Top Economics Site Contributor TalkMarkets Contributor Finance Blogs Free PageRank Checker Active Search Results Google+

This Web Page by Steven Hansen ---- Copyright 2010 - 2016 Econintersect LLC - all rights reserved