May 2020 Headline Wholesale Sales And Inventories Remain In Recession Territory

The headlines say wholesale sales were up month-over-month with inventory levels remaining very elevated. Our analysis shows a decline in the rate of growth for the rolling averages.

Analyst Opinion of this month's Wholesale Sales

This data was significantly affected by the coronavirus.

Overall, the rolling averages tell the real story - and they declined this 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 by 0.9 % month-over-month.
  • unadjusted sales year-over-year growth is down 21.1 % year-over-year (it was down 20.2 % YoY last month)
  • unadjusted sales (but inflation-adjusted) down 22.1 % year-over-year
  • the 3 month rolling average of unadjusted sales decelerated by 8.0 % month-over-month, and down 14.5 % year-over-year.

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  • unadjusted inventories down 4.2 % year-over-year (decelerated 1.3 % month-over-month), the unadjusted inventory-to-sales ratio is 1.53 which is at recessionary levels.

US Census Headlines based on seasonally adjusted data:

  • sales up 5.4 % month-over-month,down 16.2 % year-over-year (it was reported sales -20.7% last month YoY)
  • inventories down 1.2 % month-over-month - down 4.2 % year-over-year,
  • inventory-to-sales ratios were 1.34 one year ago - and are now 1.53
  • expectations for inventory growth from Econoday was -1.2 % to -0.9 % (consensus -1.0 %).

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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.

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