Business Sales Increase Outstrips Inventory Increase for February

A boost in business sales outstripped inventories' increase for February, according to a Commerce Department report (link opens in PDF) released today.

Seasonally adjusted sales bumped up 1.2% to $1.29 trillion from January to February, led primarily by a 1.7% increase in merchant wholesaler sales. Retailers pulled in 1.2% more revenue than the previous month, while manufacturers managed a 0.9% sales bump.

Business inventories squeaked up a seasonally adjusted 0.1% to $1.64 trillion for February. Building materials & garden supply stores (+4.8%) and clothing stores (+3%) registered the largest month-over-month increases. Furniture, electrical, & appliance stores inventories dropped 2.2%, followed by a 1.2% slump in food & beverage stores supplies.

To understand the rate at which goods are being made and sold, economists compute an inventories/sales ratio. Since sales increased more than inventories from January to February, the inventories/sales ratio fell, to 1.28, compared to the previous month's 1.29 value. The February 2012 ratio was 1.26.



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