Wholesale Sales Drop, Inventories Rise for October
Sales were down and inventories up for October, according to a U.S. Department of Commerce report [link opens in PDF] released today.
Sales of merchant wholesalers were $408.5 billion for October, 1.2% less than September's revised level. In a double whammy, inventories rose to $497.1 billion, up 0.6% from September, beating analyst estimates of a 0.4% bump. Compared to October 2011, sales were up 2.3% and inventories increased by 6.6%.
To understand the rate at which goods are being made and sold, economists compute an inventories/sales ratio. Since sales fell and inventories rose from September to October, the inventories/sales ratio also rose, to 1.22, compared to the previous month's 1.19 value.
In a special addendum, the Department of Commerce noted that Hurricane Sandy seemed to have had positive, negative, and neutral effects on both sales and inventories. Some firms reported a drop in sales or increased inventories due to power outages and closures. Others reported decreased inventories due to storm damage while many companies reported no Sandy effect.
The Department said the reliability of its survey remained unchanged.
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