Wholesale inventories declined 0.4% m/m in September (Briefing.com consensus -0.1%), on top of a downwardly revised 0.1% increase (from +0.2%) in August. That was the largest decline since October 2017.
Wholesale sales were flat in September after declining 0.1% in August.
On a year-over-year basis, total sales were down 0.6% while total inventories were up 4.8%. Durable inventories decreased 0.1% in September, driven by a 1.2% decline in automotive inventories.
Nondurable inventories fell 0.9% in September, paced by a 2.2% decrease in drugs inventories and a 4.9% decrease in farm products inventories.
The inventories-to-sales ratio held steady month-over-month at 1.36, but was up from 1.29 a year ago.The key takeaway from the report is that it could prove difficult for wholesalers to gain pricing power given that inventory growth remains well ahead of sales growth on a yr/yr basis.