The Commerce Dept. said Tuesday that wholesale inventories fell 1.4% in April, following a 1.8% drop in March which was revised from an original estimate of a 1.6% decline. Total inventories fell to a seasonally adjusted $405.4 billion at the end of April, marking the eighth consecutive month that inventories dropped.
» End-of-month inventories of durable goods were down 2.2% from last month and were down 5.9% from last April.
» Inventories of metals and minerals, except petroleum, were down 6.8% from last month.
» Inventories of nondurable goods were virtually unchanged.
» Inventories of apparel, piece goods, and notions were down 2.6% from last month, while inventories of paper and paper products were up 2.8%.
On a y/y basis, inventories were down 6.2% from the April 2008 level. Sales were 19.5% lower.
The 1.4% decrease in April inventories of wholesalers exceeded Wall Street analyst expectations for a 1.1% decline. The increase shows companies continue to trim supplies as they try to avoid getting bogged under too much unsold merchandise. The hope is that businesses will get their inventories more in line with reduced sales levels. Once that occurs, then they are expected to start increasing orders, which will translate into a more robust manufacturing activity.
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