Wholesale Inventories Gain Outshined by Sales in September

Wholesale inventories for the month of September came in with a gain of 1.1%, according to the Commerce Department. This has a lag because it is a September report. This is also less current than the strong consumer sentiment reading we saw earlier this morning. Dow Jones was calling for a gain of 0.4% and Bloomberg was calling for a gain of 0.3%. Today's gain of 1.1% was higher than all economists in the range of Bloomberg's consensus group of -0.2% to +0.5%.

It should be worth noting that petroleum inventories were up by 5.5% in September, but prices have dropped since. That may further help the next reading.

Wholesalers appear to be building inventories for stronger expectations. It is worth noting that the sales component was up by 2.0% for September, so orders were not weak as had been seen over the summer. This 1.1% gain comes to a seasonally adjusted $494.15 billion. August was revised to +0.8% on inventories and to a gain of 1.0% on wholesale sales.

The ratio of inventories to sales dipped down to 1.19 in September from 1.20 in the prior month.

JON C. OGG

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