Here’s Why Wholesalers are Bullish on the US Economy

Wholesale Sales and Inventories continue to exhibit bullish sentiment by wholesalers. Wholesalers continue to build inventories in anticipation of future sales, and sales just rose for the eighth month out of the last nine months.

Here’s your Cheat Sheet to the economic data:

Sales. The U.S. Census Bureau announced today that March 2011 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 $392.0 billion, up 2.9 percent from the revised February level and were up 15.4 percent from the March 2010 level. The February preliminary estimate was revised upward $1.9 billion or 0.5 percent. March sales of durable goods were up 2.3 percent from last month and were up 13.6 percent from a year ago. Sales of lumber and other construction materials (NYSE:XLB) were up 7.3 percent from last month and sales of metals (NYSE:DBB) and minerals, except petroleum, were up 6.7 percent. Sales of nondurable goods were up 3.4 percent from last month and were up 16.8 percent from last year. Sales of petroleum and petroleum products (NYSE:USO) were up 7.9 percent from last month and sales of chemicals and allied products were up 6.3 percent.

Inventories. Total inventories of merchant wholesalers, except manufacturers’ (NYSE:XLI) sales branches and offices, after adjustment for seasonal variations but not for price changes, were $442.9 billion at the end of March, up 1.1 percent from the revised February level and were up 13.3 percent from a year ago. The February preliminary estimate was revised upward $0.1 billion. End-of-month inventories of durable goods were up 0.4 percent from last month and were up 8.8 percent from last March. Inventories of machinery, equipment, and supplies were up 2.3 percent from last month, while inventories of computer and computer peripheral equipment and software were down 3.9 percent. End-ofmonth inventories of nondurable goods were up 2.0 percent from February and were up 19.9 percent compared to last March. Inventories of drugs and druggists’ sundries were up 3.0 percent from last month and inventories of chemicals and allied products were up 2.7 percent.

Inventories/Sales Ratio. The March inventories/sales ratio for merchant wholesalers, except manufacturers’ sales branches and offices, based on seasonally adjusted data, was 1.13. The March 2010 ratio was 1.15

Monthly Wholesale Trade Survey: national estimates of monthly sales, end-of-month inventories, and inventories-to-sales ratios by kind of business for wholesale firms located in the United States. Specifically, the MWTS covers wholesale merchants who sell goods on their own account and include such businesses as wholesale merchants or jobbers, industrial distributors, exporters, and importers.

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