Wholesale inventories in March rose 0.2% as expected by the Econoday consensus. February was revised from 0.4% to 0.3 which will take a tick off GDP first-quarter revisions.

Wholesale inventories came in at a consensus 0.2 percent increase led by a sharp build in autos, excluding which March inventories were unchanged. Sales in the wholesale sector were unchanged in the month though the mismatch with the inventory build does not lift the stock-to-sales ratio which holds at a healthy 1.28. These results will not upset expectations for an incremental 0.1 percent rise in Friday’s business inventories report. Inventories have been moving higher gradually, largely in line with underlying demand.

Auto Inventories Rise as Sales Slump

Inventories vs Sales

The above chart from the Census report Monthly Wholesale Trade: Sales and Inventories March 2017.

The idea that inventories are healthy given poor retail sales reports is more than a bit questionable. A disaster awaits autos.