Business sales slumped in March while inventories stayed steady, according to a Commerce Department report (link opens in PDF) released today.
Seasonally adjusted sales fell 1.1% to $1.27 trillion from February to March. A 1.6% drop in merchant wholesalers had the largest negative impact on March's numbers, but sales went red across the board. Manufacturers' sales decreased 1%, while retailers saw a 0.6% slide.
On the supply side, overall inventory levels remained unchanged from February. Although retailers saw a 0.5% inventory decrease, a 0.4% bump in merchant wholesalers' stocks offset hopes of an inventory squeeze.
To understand the rate at which goods are being made and sold, economists compute an inventories/sales ratio. Since sales fell and inventories remained unchanged from February to March, the inventories/sales ratio increased to 1.29 compared to the previous month's 1.28 value. The March 2012 ratio was 1.26.
In the last 12 months, inventory growth has been more than double sales growth. Total business sales are up 1.8%, while inventories have increased 4.5%. Retailers have seen the largest spread, with sales up just 2.9% compared to a 7.3% jump in inventories.
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