Main takeaways:
  • Wholesale sales are moving sideways (adjusted for prices)
  • Inventory buildup is mostly due to petroleum; nevertheless an inventory correction is widely expected for the third quarter.
  • Analysts reduced 3Q growth forecasts by 0.1 to 0.3pp accounting for lower inventories.


The chart below shows that retail, wholesale and manufacturing sales, all slowed down materially since mid-2014.
Retail sales have already rebounded and it is clear that most of its slowdown was related to the fall in gasoline prices (see US July/15 Retail Sales -- good).
So, let's take a closer look at wholesale sales.


Part of the slowdown in wholesale sales is clearly due to price effect. Adjusting for falling prices, wholesale sales appear to have stabilized in the last couple of quarters.

Another frequent concern is the inventory buildup at wholesalers. The chart below show that the inventory to sales ratio has increased sharply in the last three quarters.

But a similar price effect might be distorting oil inventories. Excluding autos, farm, and petroleum, the rise in the inventory-to-sales is less pronounced.



Details: charts below break wholesale data into nondurable and durable sectors.
Nondurable




Durable






Total wholesale