Not that it matters but another bad release:
Inventories relative to sales in the wholesale sector remained bloated for a 2nd straight month in February, up 0.3 percent vs a decline of 0.2 decline in wholesale sales. The mismatch keeps the stock-to-sales ratio unchanged at 1.29, which is the highest reading since the recession period of June 2009.
Revisions to January are even more unfavorable with the inventory build revised 1 tenth higher to plus 0.4 percent and sales revised even lower to minus 3.6 percent from an initial minus 3.1 percent. January, reflecting a huge price-related downswing in petroleum products, was the worst month for wholesale sales since March 2009.
But it’s more than any one sector as sales declines in the 2 months are spread out broadly through components. Pulling February down the most were electrical goods, machinery, and metals, all pointing to weakness in the industrial economy, weakness perhaps related to declining exports. Wholesale sales of autos were also weak. All these components show bloated gains in their stock-to-sales ratios.
The wholesale sector is the intermediary between manufacturing and retailing, and the signals it is sending tell of weakening demand on the retail side and point to slowing production on the manufacturing side. These of course are negative signals for future employment growth. Watch for the business inventories report on Tuesday which will include an inventory update out of retailing.