When considering the huge amounts of economic data that becomes available to economists, analysts, and investors every day, it's interesting to look at how long it takes to prepare the various reports. Some information, such as the Labor Department's monthly report on employment, comes out just a few days after the end of the month that the data addresses. Other releases, such as the figures on personal income and spending, aren't available until nearly the end of the following month.

One release that takes a while to arrive is the Census Bureau's data on wholesale inventories. These figures come out after more than a month has passed from the end of the month to which the information applies. However, what this data lacks in speed, it makes up for in detail.

The basic concept
Although the wholesalers that consumers know best are companies such as Costco (NASDAQ:COST) and BJ's Warehouse (NYSE:BJ), the wholesale trade report includes quite a bit more than just wholesalers that sell directly to the public. In compiling its statistics, the Census Bureau collects data from wholesalers that sell products to merchant retailers and other businesses all along the supply chain. More than 4,000 businesses participate in the survey, which collects information not only on inventory levels but also on monthly sales figures. Businesses included in the survey are not solely manufacturers selling their own products; businesses that act as brokers or agents or that provide other types of third-party marketing functions are also included.

The survey itself is extremely simple. It includes a single page of instructions and one other page for the business to enter its information on sales, inventory, and the number of business establishments it operates. Because a significant amount of related information on sales is available sooner from other sources, most economists and analysts focus on the inventory numbers. Nevertheless, the release is the only one that focuses specifically on sales and inventories at the wholesale level.

The report not only provides overall figures for the entire wholesale sector but also breaks down the data into several subcategories by type of business. It first separates durable from nondurable goods and then creates several more subdivisions according to the industries covered in the report. Industries in the durable-goods numbers include automotive, furniture, lumber, professional equipment (with computer equipment as a subset), metals, electrical equipment, hardware, machinery, and miscellaneous. Nondurables include paper, drugs, apparel, groceries, farm products, chemicals, petroleum products, alcohol, and, again, miscellaneous. The Census Bureau makes adjustments to the data based on seasonal factors and the number of trading days in a given period; however, the report also includes the unadjusted numbers.

Economic implications
As a measure of wholesale activity, the wholesale trade report focuses on business transactions and production decisions made before products go on sale to consumers. As a result, some economists look at wholesale activity as a leading indicator of consumer activity, as retailers try to anticipate consumer demand by managing their supply chains in a way that leaves them perfectly positioned to meet their customers' wishes. If sales are rising, then retailers are anticipating strong demand and want to maintain high levels of retail inventory in their stores.

It's important not to get confused by the different ways certain terms get used in this context. When this report refers to wholesale inventories, it's talking about the inventories that wholesalers maintain that are ready for shipment to retailers. Once a wholesaler receives an order, the ordered goods become sales for the wholesaler, but they're usually added to the retailer's inventories until the retailer sells the goods to its customers.

The report that came out yesterday on August activity shows strong growth in both wholesale sales and inventories. Because both figures rose by the same 1.1% amount, the ratio of inventories to sales stayed constant at 1.15, which is a historically low level. This ratio is quite helpful in evaluating prospects for wholesalers; high inventories in relation to sales suggests a glut of goods facing slow demand, while low levels of inventory indicate relatively high demand but raise the possibility of supply shortages.

Of particular interest are the numbers related to petroleum products. Sales are up nearly 25% from year-ago levels, a reflection of the rise in oil prices over the past 12 months. Inventories, however, paint a mixed picture; they have risen nearly 10% year over year but fell 6.5% from last month's levels. The temptation is to conclude that drawdowns in inventory may reflect trouble for the coming winter. However, it's important to remember that the data here reflects the dollar value of inventories rather than raw quantities, and so when prices fall dramatically in a given month, inventory values will fall even if the actual amount of physical inventory stays constant.

In summary ...
By providing detailed information about business activity before goods reach consumers, the Census Bureau report on wholesale inventories fills in the blanks that previous data releases leave behind. By looking at the wholesale data, you can anticipate trends that will affect consumer behavior and the success of retail businesses.

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Fool contributor Dan Caplinger shops at Stock Advisor recommendation Costco every time he visits his mother-in-law, but he doesn't own shares of any of the companies mentioned in this article. The Fool has a disclosure policy.