January 2021 Headline Wholesale Sales Improved And Inventories Marginally Grow

The headlines say wholesale sales were up month-over-month with inventory levels marginally growing. Our analysis shows improvement in the rate of growth for the rolling averages.

Analyst Opinion of this month's Wholesale Sales

Our view is that this data set is worse than last month.

Year-over-year employment changes and sales growth reasonably correlated until the coronavirus hit.

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This data set is considered an outlier and may have issues with data gathering, changing dynamics of the wholesale industry, or definition issues with what is considered wholesale.

Note that Econintersect analysis is based on the change from one year ago. Econintersect Analysis:

  • the unadjusted sales rate of growth decelerated 4.8 % month-over-month.
  • unadjusted sales year-over-year growth is up 0.4 % year-over-year (it was up 5.3 % YoY last month)
  • unadjusted sales (but inflation-adjusted) down 3.9 % year-over-year
  • the 3 month rolling average of unadjusted sales accelerated by 0.8 % month-over-month, and up 1.8 % year-over-year.

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  • unadjusted inventories up 1.0 % year-over-year (accelerated 2.2 % month-over-month), the unadjusted inventory-to-sales ratio is 1.40 which is high but not recessionary.

US Census Headlines based on seasonally adjusted data:

  • sales up 4.9 % month-over-month, up 5.9 % year-over-year (it was reported sales down 1.7 % last month YoY)
  • inventories up 1.3 month-over-month - up 0.6 % year-over-year,
  • inventory-to-sales ratios were 1.31 one year ago - and are now 1.24
  • expectations for inventory growth from Econoday was 0.4 % to 1.3 % (consensus +1.3 %).

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Wholesale sales were at record highs for almost two years - until 2015 where they contracted year-over-year - this contraction ended in 2017 but returned in 2019. Now we have the coronavirus impact.

Seasonally Adjusted Inventory-to-Sales Ratio

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