Highlights
Wholesale inventories showed no change in October for a year-on-year increase of 4.6 percent, down from a year-on-year pace of 5.2 percent in September. Inventories are in special focus given the build-up in the third quarter that is likely to result in drawdowns, and downward pressure on GDP, during the fourth quarter. Note that the month-to-month change in September, the last month of course for the third quarter, was revised down 2 tenths to a 0.6 percent increase.

Activity on the wholesale level, which is at the very base of the supply chain, is especially important and today's data will raise expectations that businesses are successfully cutting back inventories. Auto inventories fell 1.5 percent following gains in the prior two months. Auto sales have been mixed. Inventories of metals also declined reflecting strong sales which rose 3.8 percent in the month. Metals producers have been raising prices in recent weeks, a reflection of strong sales and thinning inventories. Chemicals, another area of price pressure, also show a decrease in inventories and a rise in sales. Petroleum inventories jumped 3.7 percent in the month reflecting price effects.

Overall sales at the wholesale level jumped 0.7 percent in the month, a break for most wholesalers as they trim back inventories. The stocks-to-sales ratio is at a new low of 1.09. Year-on-year wholesale sales are up 11.5 percent.

Inventories at factories were posted in the factory orders report last week and show a 0.1 percent gain for October. Inventories at retailers, to be posted Friday with the business inventories report, will wind up the data for October. And going into Friday's report, inventories appear to be flattening out, a plus for economic stability but again a minus for GDP growth.

2007 Release Schedule

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