Business sales and inventories were both up in March, according to a Commerce Department report (link opens as PDF) released today.
Seasonally adjusted sales grew 1% from February to reach $1,326 billion for the month. The largest percentage gain growers were retailers (+1.5%) and merchant wholesalers (+1.4%), while manufacturing increased just 0.3%. From today's lackluster April retail report, however, it seems that strong sales might not be here to stay.
A 6.5% year-over-year boost in merchant wholesalers sales in March provided the primary push behind a 4.3% rise in total business sales when comparing March 2014 to March 2013. Manufacturing was up just 2.6% in the same period.
As March sales soared, inventories increased a seasonally adjusted 0.4% to $1,717 billion. Analysts were almost spot-on, having predicted a 0.5% rise. Merchant wholesalers proved to be the big inventory builders for March, expanding 1.1% as retailers flatlined and manufacturers edged up just 0.1%. Overall inventories were up 4.7% year over year in March.
To understand the rate at which goods are being made and sold, economists compute an inventories/sales ratio. Since sales and inventories expanded relatively similar amounts from February to March, the inventories/sales ratio stayed steady at 1.30. The March 2013 ratio was 1.29.