MNI DATA ANALYSIS: US October Wholesale Inventories Down 0.5%>

--Oct Wholesale Sales Up 0.7%;Inventory/Sales Ratio 1.25 Vs 1.26

--Oct Business Inv Tracking -0.1%, Business Sales +0.5%

By Holly Stokes and Sara Haire

     WASHINGTON (MNI) - The value of wholesale inventories fell 0.5% in 

October, revised down from the 0.4% decline in the advance estimate, 

while wholesale sales saw a 0.7% increase, data released Friday by the 

U.S. Commerce Department showed. 

     With the addition of the 0.5% decline in wholesale inventories 

reported Friday, an MNI calculation expects a 0.1% negative reading for 

business inventories when it is released, assuming no revision to the 

0.1% decline reported for retail inventories in the advance estimate. 

Factory inventories saw a 0.2% gain for October, the report stated on 

Monday. 

     The 0.7% increase for wholesale sales released Friday, comes in 

addition to a 0.2% increase for retail trade sales from last month's 

advanced sales release and the 0.6% increase for factory shipments 

reported on December 4, adding up to a 0.5% increase for business sales 

barring a large revision to retail trade sales.  

     With the decline in October wholesale inventories and the larger 

increase in wholesale sales, the inventory/sales ratio fell to 1.25 from 

1.26 in September, hitting its lowest since December 2014 (1.25). The 

ratio was below the 1.30 mark in October 2016, as sales have increased 

faster than inventories over the last year. 

     Excluding the auto category, wholesale inventories would have been 

down 0.5% in October after a 0.2% increase in the previous month, an MNI 

calculation showed. Sales would have been up 0.5% in October if auto 

sales were excluded. This followed a 1.5% gain in September, with the 

year-over-year seeing a 7.8% increase. 

     The value of durable inventories rose by 0.1% in the month, though 

auto inventories fell by 0.7%. The remaining durables components were 

mixed, with gains in lumber, metals, hardware, and machinery. Aside 

from autos, the biggest loss was in electrical(-0.6%). 

     Nondurables inventories were down 1.3% in October. The biggest 

declines were seen in drugs (-2.5%), farm products (-3.7%), and 

miscellaneous nondurables (-2.7%). The remaining categores mainly saw 

decreases, with only apparel, chemicals, and petroleum seeing gains.   

     Durables goods sales were up 1.3% in the month, with auto sales up 

3.4%. The remaining components saw declines in professional equipment, 

computer equipment, metals, and electrical, though not enough to offset 

the strong gains in other categories. 

     Nondurable goods sales were up 0.2% in October after a 2.0% gain in 

September. Petroleum sales posted the only decline of 5.9%, this follows 

a 12.7% increase in September, but still up 16.7% year-over-year. 

     ** MNI Washington Bureau: 202-371-2121 ** 

[TOPICS: MAUDS$,M$U$$$]