Last month -0.1% vs. +0.1% prior estimate

US business inventories fell by -0.1% in February vs -0.1% estimate. Moreover the prior month was revised lower to -0.1% vs +0.1% previously reported.

With lower inventories and revisions to prior months this once again does not fit well within the GDP estimates for Q1. Retail sales were weaker this morning suggesting that there may be another ratchet down (will it go negative?).

Other details from the report:

  • three-month annualized change in inventories -14.6 billion
  • manufacturers inventories fell -0.4% after falling -0.5% in the prior month
  • wholesalers inventories fell 0.5%in February after falling 0.2% in the prior month
  • retailing inventories rose +0.6% in February after rising 0.4% in the prior month
  • the inventory to sales ratio rose to 1.41% in February vs. 1.37% a year ago
  • total sales for the month fell by - 0.4% in February. January sales fell by -0.8%.

Not a great report with sales declining along and inventories declining along with it. Of note is the manufacturers and wholesales inventories fell, but the retailer inventories advanced. That is not a good combination.

Looking at the inventory to sales ratio, throwing out the spike from the great recession, it suggests that goods are not flying off the shelves....