- Prior was +0.5%
- Wholesale sales +2.8% vs 1.8% prior (revised to +2.0%)
The inventory number is slightly positive for Q3 GDP.
For background, the Census Bureau’s monthly wholesale trade report, formally Monthly Wholesale Trade: Sales and Inventories, is released at 10 am ET about five to six weeks after the reference month ends. It covers merchant wholesalers, the businesses that buy goods from manufacturers and resell them to retailers, other businesses and institutions, excluding manufacturers’ own sales branches and offices.
The headline figure is the monthly change in wholesale inventories. An advance estimate is published about a week or two earlier in the Advance Economic Indicators report, so the full release is largely a revision to a number markets have already seen. It also adds wholesale sales and a detailed breakdown between durable goods, such as machinery, autos and parts, metals, lumber and electrical equipment, and nondurable goods, such as groceries, drugs, chemicals, petroleum and farm products.
The inventory-to-sales ratio shows how many months it would take wholesalers to clear existing stock at the current pace of sales. A rising ratio can signal softening demand or deliberate stockpiling, while a falling ratio suggests lean supply and potential restocking ahead. The figures are in nominal dollars, so price swings, particularly in petroleum products, can move the numbers without any change in physical volume.
The report’s main use is in GDP tracking. Changes in private inventories are one of the most volatile contributors to quarterly growth, and the wholesale figures feed into economists’ and nowcasting models’ estimates of that component.
Wholesale inventories rarely move markets. They’ve drawn more attention in recent years as tariff-driven stockpiling and subsequent drawdowns have created large swings in inventory investment and distorted quarterly GDP.
This article was written by Adam Button at investinglive.com.