Wholesale Inventories MoM

Wholesale Inventories MoM is the monthly percent change in end-of-month stocks held by US merchant wholesalers, firms selling goods on their own account. Coverage is employer firms selling on their own account, including distributors, importers and exporters, while manufacturers sales branches and agents and brokers are excluded. Estimates cover durable goods, durable items, and nondurable goods, faster-turning goods, in nominal dollars, not price-adjusted, after seasonal and trading-day smoothing.

The headline is read as up or down in the adjusted stock, and with sales, since figures are in nominal dollars without price adjustment. The inventories to sales ratio shows months of sales held in stock, with no official threshold, and estimates feed into GDP accounts.

Questionnaires cover the month just ended, with replies requested within 10 business days and at least 4 weeks of collection. Final processing takes about 5 business days after collection. Advance stocks appear at 8:30 AM Eastern, 25 to 29 days after month end, adjusted and unadjusted for total, durable and nondurable, with no sales. It covers the reference month, the preceding month and the comparable month.

The full report follows at 10:00 AM Eastern about 40 days after, with preliminary reference-month estimates and final preceding-month data plus sales and ratios. Figures appear adjusted and unadjusted with standard errors, preceding data turns final after 30 days with an annual benchmark, and the advance difference is published.

Durable stocks swing with investment cycles while nondurable stocks turn faster on food and fuel demand.

• Durable goods: durable wholesale stocks that move with the investment cycle.

• Nondurable goods: faster-turning everyday stocks, heavy in food and petroleum.

• Machinery: the largest durable stock, long-lived equipment held by machinery wholesalers.

• Automotive, electrical and professional equipment: pipeline stocks for vehicles, devices and business tools.

• Drugs and groceries: the largest nondurable stocks for repeated daily use.

• Other materials and goods: metals, lumber, apparel, paper, petroleum, chemicals and alcohol.

Durable and nondurable can move in opposite directions, netting to the headline. Sales falling faster than stocks can lift the ratio even as stocks fall, so falling stocks alone do not mean leaner pipelines.

1. Collect: Sampled firms report sales and end-of-month inventories at cost for owned goods. The sample covers about 4200 firms through mail, fax, web and phone.

1. Impute: Missing values are modeled from similar-sized firms in the same industry plus administrative data, about 30% of totals in a typical month.

1. Weight and sum: Totals sum reported and imputed values times weights, 1 for certainty firms and up to 500 for the smallest, Horvitz-Thompson basis.

1. Benchmark: Monthly totals are anchored to annual wholesale survey totals, and period changes are computed from those anchored totals.

1. Month-on-month change: The headline divides the stock change by the revised preceding-month stock times 100 on adjusted and unadjusted series. Example: 949.4 billion minus 940.0 billion divided by 940.0 times 100 gives 1.0%.

1. Adjust and scale: Seasonal and trading-day smoothing uses the X-13ARIMA-SEATS program, with no price adjustment. The ratio divides inventories by same-month sales, for example 949.4 divided by 790.0 equals 1.20.

1. Uncertainty: The margin is 1.753 standard errors, about 90% confidence, and an asterisk means the interval contains 0. Variances use random groups. For example, an error of 0.2 points gives a margin of 0.35 points and an interval of 0.65% to 1.35% excluding 0 with no asterisk.