December 2018 Headline Wholesale Sales Declined And Inflation Adjusted Growth Is Contracting

The headlines say wholesale sales declined month-over-month with inventory levels worsening and elevated. Our analysis shows a deceleration of the rate of growth for the rolling averages.

Analyst Opinion of this month's Wholesale Sales

Overall, the rolling averages tell the real story - and they declined this month. This sector's growth continues to trend down. This sector is contracting if one inflation adjusts the data.

Inventory levels this month are at recessionary levels.

To add to the confusion, year-over-year employment changes and sales growth do not match.

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

  • unadjusted sales rate of growth decelerated 2.3 % month-over-month.
  • unadjusted sales year-over-year growth is up 1.2 % year-over-year (it was 3.5 % YoY last month)
  • unadjusted sales (but inflation-adjusted) down 0.3 % year-over-year
  • the 3 month rolling average of unadjusted sales decelerated 1.2 % month-over-month, and up 4.7 % year-over-year.

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  • unadjusted inventories up 7.3 % year-over-year (accelerated 0.9 % month-over-month), unadjusted inventory-to-sales ratio is 1.35 which is at recessionary levels.

US Census Headlines based on seasonally adjusted data:

  • sales down 1.0 % month-over-month, up 1.0 % year-over-year (it was reported sales up 4.0 % last month YoY)
  • inventories up 1.1 % month-over-month - 7.3 % year-over-year,
  • inventory-to-sales ratios were 1.25 one year ago - and are now 1.33.
  • expectations for inventory growth from Econoday was consensus range of 0.1 % to 0.3 % (concensus 0.2 %).

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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. This month sales significantly slowed.

Seasonally Adjusted Inventory-to-Sales Ratio

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