Being concerned over the July wholesale data being so much less good, we now have a “surprise” – the August 2011 data rebounded strongly on all counts, breaking the less good trendlines.
- Year-over-year sales growth was 18.2% (inflation adjusted 11.7%).
- Month-over-month sales improved 7.2%.
- Inventories actually fell on rising sales volumes bringing inventories to new post recession lows for Augusts.
Punters will have a hard time spinning wholesale sales negatively.
July 2011 broke a 4 month streak of record Wholesale sales data. Now wholesale sales have been growing year-over-year 5 of the last 6 months.
Overall, the inventory-to-sales ratios (a rising ratio is an indicator of economic slowing) rose to the high end of a normal range in July. Again, “surprise” – we are now at the low end of the range, and at historical low levels for Augusts.
We are not really understanding how wholesale sales can be so strong in comparison to the rest of the economy. Econintersect does not use sales in its economic models, but expect sales to generally correlate. Could part of the good data be a reflection of retail concerns’ purchases anticipating a strong holiday season?