Business Inventories MoM

Business Inventories MoM is the monthly percent change in total stocks in Manufacturing and Trade Inventories and Sales (MTIS). MTIS is a monthly Census Bureau program covering manufacturers, merchant wholesalers and retailers across 3 sectors. It excludes services and nonmerchant intermediaries.

Stocks mean unsold goods on hand in current dollars without price adjustment. The Bureau of Economic Analysis uses the data in GDP estimates for policy work.

Questionnaires cover the month just ended, with manufacturers reporting on a calendar month basis. The Census Bureau publishes results about 6 weeks after each reference month on a scheduled morning release. Each release shows preliminary new figures and revised prior figures. It publishes seasonally adjusted and unadjusted levels, percent changes and ratios.

Seasonal adjustment removes predictable calendar effects. A starred change means its 90% interval includes zero and lacks evidence of change. The ratio shows months of supply, where 2.5 means two and a half months on hand.

Total stocks move when any of the 3 sectors builds or clears goods faster than sales.

• Manufacturers' inventories: end of month stocks at cost by stage, covering materials, work in process and finished goods, plus shipments from plants. The M3 panel tracks this sector.
• Merchant wholesalers' inventories: end of month stocks of wholesalers taking title to goods, covering durables and nondurables.
• Retailers' inventories: merchandise for sale at cost in stores and warehouses, with detail by kind of business.

Stocks can rise while sales fall, lifting the ratio and signaling overhang.

1. Collect: survey about 13000 retailers, about 4200 wholesalers and a panel of about 4700 units from about 3000 companies, including M3.
2. Edit and impute: fill missing or failed responses with values from similar size firms in the same industry.
3. Weight and expand: scale retail and wholesale responses by inverse selection probability, a method called Horvitz-Thompson estimation.
4. Benchmark: align monthly totals to annual census surveys so detailed industries sum to group totals.
5. Seasonal adjustment: run unadjusted estimates through X-13ARIMA-SEATS with the X-11 filter, then publish adjusted and unadjusted side by side.
6. Aggregate and derive: add sector stocks and sales into totals, then divide stocks by sales for the ratio and compute percent changes.