US wholesale inventories edged higher in April as sales also rose
Government data showed a 0.1% April rise in both U.S. wholesale inventories and sales, leaving the inventory-to-sales ratio unchanged.
By Marcus V. Thorne · Markets Editor
· 2 min read
U.S. wholesale inventories increased 0.1% in April, the government said Friday, while sales at wholesalers also advanced 0.1%. The small parallel gains left a key measure of stock levels unchanged, suggesting firms were keeping goods on hand broadly aligned with demand.
Inventories measure products that have been made or acquired for sale but have not yet been sold. For wholesalers, the category covers goods held between producers and retailers or other buyers, making the data a useful gauge of how companies are matching supply with the pace of orders.
Businesses typically add to inventories when sales are rising, according to the government report cited by MarketWatch. When inventory growth runs far ahead of sales, it can indicate that goods are accumulating faster than customers are buying them. When stocks are too lean, companies can face shortages or lost sales if demand holds up.
Inventory ratio holds steady
The inventory-to-sales ratio was unchanged at 1.35 months in April. That means existing wholesale stocks would take about 1.35 months to clear at the current sales pace, assuming no additional goods were added.
The ratio stood at 1.39 months a year earlier, according to the report. The lower reading compared with April of the prior year indicates that wholesalers were carrying less stock relative to sales than they did then.
MarketWatch reported that the current ratio points to businesses producing enough goods to meet demand without building excess stock. The data do not show a sharp acceleration in either inventories or sales, with both measures posting only 0.1% gains for the month.
Wholesale inventory figures are watched because they sit inside the broader flow of goods through the economy. They can signal whether companies are preparing for stronger sales, correcting overstocked positions or holding output close to current demand. The April figures, as reported, showed little change in that balance.
This story draws on original reporting from MarketWatch.
