Posted by Joseph Y. Calhoun, III

Wholesale sales rose in September:

Sales. The U.S. Census Bureau announced today that September 2009 sales of merchant wholesalers, except manufacturers’ sales branches and offices, after adjustment for seasonal variations and trading-day differences but not for price changes, were $320.2 billion, up 0.7 percent (+/-1.1%)* from the revised August level, but were down 15.2 percent (+/-1.6%) from the September 2008 level. The August preliminary estimate was revised upward $0.2 billion or 0.1 percent. September sales of durable goods were up 0.7 percent (+/-1.2%)* from last month, but were down 16.2 percent (+/-2.5%) from a year ago. Sales of nondurable goods were up 0.6 percent (+/-1.2%)* from last month, but were down 14.3 percent (+/-1.8%) from last year.

Inventories were down again:

Inventories. Total inventories of merchant wholesalers, except manufacturers’ sales branches and offices, after adjustment for seasonal variations but not for price changes, were $377.7 billion at the end of September, down 0.9 percent (+/-0.5%) from the revised August level and were down 15.0 percent (+/-1.1%) from a year ago. The August preliminary estimate was revised downward $0.1 billion. End-of-month inventories of durable goods were down 0.9 percent (+/-0.5%) from last month and were down 16.6 percent (+/-1.1%) from last September. Inventories of metals and minerals, except petroleum, were down 2.5 percent from last month and inventories of machinery, equipment, and supplies were down 1.4 percent. End-of-month inventories of nondurable goods were down 0.9 (+/-0.7%) from August and were down 12.4 percent (+/-1.4%) compared to last September. Inventories of farm product raw materials were down 5.6 percent from last month and inventories of beer, wine, and distilled alcoholic beverages were down 4.8 percent.

Inventory to sales ratio fell again, to 1.18. While that is moving in the right direction it still isn’t as low as I expect it to fall. In 2007 and 2008 the ratio fell to less than 1.15 and I see no reason to believe that it won’t again. That means the long awaited inventory restocking will have to wait a bit longer.