U.S. Wholesale Inventories Edge Up as Sales Momentum Outpaces Stock Growth

The Commerce Department’s latest economic data reveals a diverging trend in the wholesale sector for November, where wholesale inventories advanced modestly while wholesale sales demonstrated notably stronger performance. This gap between inventory growth and sales expansion signals a tightening supply-demand dynamic in the broader economy.

Wholesale Inventories Advance at Measured Pace

Wholesale inventories edged up by 0.2 percent in November, maintaining the same growth rate as the previous month. Breaking down by product category, durable goods inventories inched higher by 0.2 percent following a slight 0.1 percent dip in October, while non-durable goods inventories climbed by 0.2 percent after a more robust 0.7 percent increase the month before. The slowing growth in non-durable goods wholesale inventories marks a notable shift from October’s acceleration.

Sales Surge Significantly Ahead of Inventory Expansion

The wholesale sector’s sales performance painted a more vigorous picture in November. Wholesale sales surged by 1.3 percent, a sharp reversal from October’s 0.4 percent decline. Within this expansion, durable goods sales shot up by 1.2 percent in contrast to October’s 0.7 percent drop, while non-durable goods sales expanded by 1.5 percent after a marginal 0.1 percent decrease the previous month. The magnitude of sales growth substantially exceeded inventory gains across both categories.

Inventory-to-Sales Ratio Tightens Amid Strong Demand

The widening gap between sales and inventory growth manifested in a tighter inventory-to-sales ratio for merchant wholesalers. The ratio compressed to 1.28 in November from 1.30 in October, reflecting the extent to which sales volume outpaced stock accumulation. This compression indicates wholesalers are moving merchandise faster relative to new inventory levels, suggesting underlying demand strength in the wholesale channel that wholesale inventories must keep pace with going forward.