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 12 February 2016

December 2015 Business Sales and Inventories Remain Bad.

Written by Steven Hansen

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

Econintersect Analysis:

  • unadjusted sales rate of growth decelerated 0.8 % month-over-month, and down 2.4 % year-over-year
  • unadjusted sales (but inflation adjusted) down 0.9 % year-over-year
  • unadjusted sales three month rolling average compared to the rolling average 1 year ago decelerated 0.2 % month-over-month, and is down 2.7 % 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 shrunk 0.5 % month-over-month (up 1.6 % year-over-year with the three month rolling averages improving), and the inventory-to-sales ratio is 1.44 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 down 0.6 % month-over-month, down 2.7 % year-over-year (it was reported down 2.8 % last month).
  • seasonally adjusted inventories were up 0.1 % month-over-month (up 1.7 % year-over-year), inventory-to-sales ratios were up from 1.33 one year ago - and are now 1.39.
  • market expectations (from Bloomberg) were for inventory growth of -0.2 % to 0.3 % (consensus 0.1 %) versus the actual of +0.1 %.

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 January 2016. This is final data from the Census Bureau for December 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 II
Comments on Feyerabend’s ‘Against Method’, Part III
News Blog
Mom Breaks Down In Tears When Son With Autism Meets Service Dog
Rail Week Ending 15 October 2016 Paints A Negative Economic View
What Is The New Normal For U.S. Growth?
Affordable Care Act And Its Effect On Part-Time Employment
The Speed Of Filling Jobs Is Declining
First Working Eggs Made From Stem Cells Points To Fertility Breakthrough
Infographic Of The Day: Mega Machines
Online Platforms Double Down On TV Programming
A History Of Mars Missions
How Tesla Out Innovates Traditional Carmakers
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.
Investing Blog
Options Early Assignment - Should You Worry?
The 401k Plan Manager 17 October 2016
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
How Will The Election Outcome Impact Precious Metals?
Live Markets
21Oct2016 Market Close: Major US Indexes Close Flat On Low Volume, Crude Prices Resume Climb, US Dollar Stabilizes In Mid 98 Handle, Yes, Most Investors Are Worried Which Way This Market Will Go
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