Wholesale Sales Continue Strong Improvement

Wholesale sales continued expanding YoY in January 2011 – and is one of the few economic indicators that has exceeded its pre-recession peak for the last three months.  Highlights from today’s data report

Sales.  The U.S. Census Bureau announced today that January 2011 sales of merchant wholesalers, except manufacturers’ sales branches and offices, after adjustment for seasonal variations and trading-day differences  but not for price changes, were $387.0 billion, up 3.4 percent (+/-0.7%) from the revised December level and were up 15.4 percent (+/-1.4%) from the January 2010 level. The December preliminary estimate was revised upward $2.7 billion or 0.7 percent.  January sales of durable goods were up 2.3 percent (+/-0.9%) from last month and were up 14.5 percent (+/-1.4%) from a year ago.  Compared to last month, sales of vehicle and motor vehicle parts and supplies were up 7.8 percent and sales of electrical and electronic goods were up 3.4 percent.  Sales of nondurable goods were up 4.4 percent (+/-0.9%) from last month and were up 16.2 percent (+/-2.1%) from last year.  Sales of petroleum and petroleum products were up 10.6 percent from last month and sales of farm  product raw materials were up 5.7 percent.

Inventories.  Total inventories of merchant wholesalers, except manufacturers’ sales branches and offices, after adjustment for seasonal variations but not for price changes, were $436.9 billion at the end of January, up 1.1 percent (+/-0.5%) from the revised December level and were up 11.9 percent (+/-1.4%) from a year ago.  The December preliminary estimate was revised upward $1.5 billion or 0.3percent.  End-of-month inventories of durable goods were up 1.1 percent (+/-0.5%) from last month and were up 9.4 percent (+/-1.6%) from last January.  Inventories of computer and computer peripheral equipment and software were up 4.1 percent and inventories of hardware, and plumbing and heating equipment and supplies were up 2.4 percent from last month.  End-of-month inventories of nondurable goods increased 1.2 percent (+/-0.9%) from December and were up 15.7 percent (+/-2.1%) compared to last January.  Inventories of petroleum and petroleum products were up 3.5 percent from last month and inventories of grocery and related products were up 2.9 percent.

Inventories/Sales Ratio. The January inventories/sales ratio for merchant wholesalers, except manufacturers’ sales branches and offices, based on seasonally adjusted data, was 1.13. The January 2010 ratio was 1.16.

Econintersect’s only dispute with the headline summary – is that its relative improvement is much smaller than December.  In the parlance of the seasonal adjusting methodologies, this month should be called down (not up).  But, it is still record data (not adjusted for inflation).  Using unadjusted data, Econintersect’s graphic for sales:

Inventories are well within the normal range for January’s – but look terrible next to the low levels for immediately prior Januaries, except for 2008. 

Overall 2011 is starting with good data – but will continue this year being compared to stronger and stronger 2010 data.  At that point, we can really see what the YoY strength of wholesale sales really is.

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