December 2018 Headline Business Sales Rolling Average Continues To Decline

Headlines show final business sales data (retail plus wholesale plus manufacturing) declined. The rolling averages also declined.

Analyst Opinion of Business Sales and Inventories

Inventories grew this month. Our primary monitoring tool - the 3-month rolling averages for sales - declined again but remains in expansion. As the monthly data has significant variation, the 3-month averages are the way to view this series. Overall business sales are improving since the low point in 2015 - and the trend over the last 6 months shows growth is trending down - and this month it is below the ranges seen.

Econintersect Analysis:

  • unadjusted sales rate of growth decelerated 2.4 % month-over-month, and up 1.9 % year-over-year
  • unadjusted sales (but inflation adjusted) up 0.3 % year-over-year
  • unadjusted sales three-month rolling average compared to the rolling average 1 year ago decelerated 0.9 % month-over-month and is up 4.7 % year-over-year.

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  • unadjusted business inventories growth rate accelerated 0.4 % month-over-month (up 4.6 % year-over-year), and the inventory-to-sales ratio is 1.37 which is recessionary.

US Census Headlines:

  • seasonally adjusted sales down 0.1 % month-over-month, up 2.1 % year-over-year (published 4.2 % last month).
  • seasonally adjusted inventories were up 0.6 % month-over-month (up 4.8 % year-over-year), inventory-to-sales ratios were up from 1.34 one year ago - and are now 1.38.
  • market expectations (from Econoday) were for inventory growth of 0.0 % to 0.8 % (consensus +0.6 %).

The way data is released, differences between the business releases pumped out by the U.S. Census Bureau are not easy to understand with a quick reading. The entire story does not come together until the Business Sales Report (this report) comes out. At this point, a coherent and complete business contribution to the economy can be understood.

Today, Econintersect analyzed advance retail sales for January 2019. This is final data from the Census Bureau for December 2018 for manufacturing, wholesale, and retail (see graphs below):

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