Wholesale trade began to turn itself around for April, according to a Commerce Department report (link opens a PDF) released today.
Wholesale sales headed up a seasonally adjusted 0.5% to $416.6 billion, a relief after March's unrevised 1.6% sales slump.
Durable goods sales increased 1.6% month-over-month, led by growth in home furnishings (+5.1%) and machinery, equipment, & supplies (+5%). Nondurable goods sales fell 0.5% due primarily to sharp drop-offs in apparel (-6%), petroleum (-2.7%), and alcohol (-1.5%).
The wholesale trade report is closely watched for any inventories buildups, which could serve as one of the first major signs of a slowing economy. For April, overall inventories expanded 0.2%, matching analysts' expectations. Although automotive inventories increased 1.9%, the industry also experienced a 2.9% sales bump for the same period.
To understand the rate at which goods are being made and sold, economists compute an inventories/sales ratio. Since sales increases outstripped the rise in inventories from March to April, the inventories/sales ratio fell, from a recovery-high 1.22 to 1.21.
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