Business inventories are the dollar amount of inventories held by manufacturers, wholesalers, and retailers. The level of inventories in relation to sales is an important indicator of the near-term direction of production activity. Why Investors Care
| Released on 6/13/07 For Apr 2007 | ||||||||||||
| ||||||||||||
Highlights
Business inventories rose 0.4 percent in April, below a 0.7 percent rise in business sales that shaved 1 tenth off the stock-to-sales ratio to 1.27. Retailer inventories, the new component in this report, rose 0.3 percent in a reading not distorted by auto dealers which showed a modest 0.2 percent increase. The two previously released components, manufacturer inventories and wholesaler inventories, rose 0.5 percent and 0.3 percent.
April was a softer month for the economy than May, and April's modest rise in inventories points to restocking in subsequent months, a plus for production and employment. Supply managers have done a good job this year, having quickly worked inventories down early in the year when growth was soft and favorably positioning the nation's supply chain for current strength.
Business inventories eased in March for the biggest month-to-month decline in almost two years, slipping 0.1 percent, following a 0.2 percent rise in February. March's dip in inventories was well below the 1.4 percent jump in business sales and pushed the stock-to-sales ratio to a very lean 1.27. More recently, factory orders - a component that goes into business inventories - rose 0.5 percent in April. Also, retail sales fell 0.2 percent in April. These suggest a possible rise in inventories in April.
Business inventories Consensus Forecast for April 07: +0.3 percent
Range: +0.2 to +0.5 percent
![[Chart]](chart.gif)
|
Inventories tend to rise when economic conditions are strong; since sales are rising at the same time, the inventory-to-sales ratio may remain stable, or rise at a very slow pace. Inventories tend to drop when economic conditions are weak; since sales are falling at the same time, the inventory-to-sales ratio may remain relatively stable. The I-S ratio then begins to rise as sales fall more quickly than inventory growth. |
| 2007 Release Schedule | ||||||||||||||||||||||||||
|
powered by
![[Econoday]](../../../../../../../../../images/logo.gif){kind=logo}