Business Sales Up Strongly in March 2011

Repeating from last month’s analysis:  The way data is released, differences between the business releases pumped out by the US Census are not easy to understand with a quick reading.  The entire story doesn’t really come together until the Business Sales Report comes out.  Earlier today (analysis), Econintersect analyzed advance retail sales for April 2011, followed later by the final overall business report for March.  This is final data from the Census Bureau for March 2011 for:

US Census again has subtly revised the entire data series causing Econintersect to rebuild its data base.  Here are the headlines from the U.S. Census Bureau report (based on seasonally adjusted data):

Sales. The U.S. Census Bureau announced today that the combined value of distributive trade sales and manufacturers’ shipments for March, adjusted for seasonal and trading-day differences but not for price changes, was estimated at $1,200.1 billion, up 2.2 percent (±0.2%) from February 2011 and up 11.0 percent (±0.4%) from March 2010.

Inventories. Manufacturers’ and trade inventories, adjusted for seasonal variations but not for price changes, were estimated at an end-of-month level of $1,476.7 billion, up 1.0 percent (±0.1%) from February 2011 and up 9.7 percent (±0.4%) from March 2010.

Inventories/Sales Ratio. The total business inventories/sales ratio based on seasonally adjusted data at the end of March was 1.23. The March 2010 ratio was 1.25.

It is obvious that this is record business sales up 11% YoY unadjusted.  Repeating from Econintersect’s retail analysis today – The CPI for March was 2.7%, imported items are up 9.9%, and the PPI was up 5.8%.

None of these price indices are specifically applicable to business sales.  However two-thirds of business sales is manufacturing and wholesale which has a YoY price increase of 5.8%.  It is likely inflation is accounting for at least half of the increase.

Still an inflation adjusted growth of 5% is very solid.  Inventories too are healthy.

Econintersect agrees that inventory to sales ratios are at historic lows using unadjusted data.

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April 2011 Advance Retail Sales:  Not Bad , Not Good  by Steven Hansen

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Manufacturing Continues Solid Growth in February 2011 by Steven Hansen