Econoday Report: Business Inventories 12, 2007

2009 Economic Calendar
POWERED BY
Resource Center » U.S. & Intl Recaps \| Release Dates \| Why Investors Care \| Today's Calendar

Business Inventories

Definition
Business inventories are the dollar amount of inventories held by manufacturers, wholesalers, and retailers. The level of inventories in relation to sales is an important indicator of the near-term direction of production activity. Why Investors Care

Released on 1/12/07 For Nov 2006

Inventories - M/M change
Actual	0.4%
Consensus	0.4%
Consensus Range	0.0% to 0.5%
Previous	0.4 %

Highlights
Business inventories rose 0.4 percent in November, as expected. October was revised down 2 tenths to a gain of 0.2 percent. Retail data for November are the new data in the report, showing a 0.3 percent decrease that reflected a 1.3 percent drop in auto inventories. Excluding autos, retail inventories were up 0.6 percent. Retailer inventories of furniture and building materials were also lower, while apparel was sharply higher. Inventories of general merchandise were up 0.2 percent.

The overall rise in business sales was 0.5 percent, in line with inventories and keeping the inventory-to-sales ratio at 1.30. The recent shift higher in economic data, including this morning's retail sales report for December, will ease risk of inventory overhang. Rising inventories in line with rising sales are in fact necessary for solid economic performance.

Market Consensus Before Announcement
Business inventories rose 0.4 percent in October though business sales fell 0.2 percent. This boosted the stock-to-sales ratio to 1.31 vs. 1.30 in September and compared to 1.27 as recently as August. However, retail numbers were strong in November and we should see moderation in inventory growth and possibly a drop in the stock-to-sales ratio.

Business inventories Consensus Forecast for November 06: +0.4 percent
Range: +0.0 (flat) to +0.5 percent

Trends

Inventories tend to rise when economic conditions are strong; since sales are rising at the same time, the inventory-to-sales ratio may remain stable, or rise at a very slow pace. Inventories tend to drop when economic conditions are weak; since sales are falling at the same time, the inventory-to-sales ratio may remain relatively stable. The I-S ratio then begins to rise as sales fall more quickly than inventory growth.

Data Source: Haver Analytics

2007 Release Schedule

Released On: 1/12 2/14 3/13 4/16 5/11 6/13 7/13 8/13 9/14 10/12 11/14 12/13

Released For: Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct