September 2017 Headline Business Sales Declined

Econintersect‘s analysis of final business sales data (retail plus wholesale plus manufacturing) shows unadjusted sales contracted relative to last month whilst inventories also grew. This is the opposite of the headline view.

Analyst Opinion of Business Sales and Inventories

This was a worse month for business sales compared to last month – and inventories remain elevated. Our primary monitoring tool – the 3 month rolling averages for sales – declined and remains in expansion. As the monthly data has significant variation, the 3 month averages are the way to view this series.

Econintersect Analysis:

unadjusted sales rate of growth decelerated 1.0 % month-over-month, and up 4.8 % year-over-year

unadjusted sales (but inflation adjusted) up 1.9 % year-over-year

unadjusted sales three month rolling average compared to the rolling average 1 year ago decelerated 0.1 % month-over-month, and is up 5.1 % year-over-year.

unadjusted business inventories growth rate decelerated 0.1 % month-over-month (up 3.5 % year-over-year with the three month rolling averages showing inventory growth now growing), and the inventory-to-sales ratio is 1.36 which is above average for this month in normal times of economic growth).

US Census Headlines:

seasonally adjusted sales up 1.4 % month-over-month, up 6,4 % year-over-year.

seasonally adjusted inventories were unchanged month-over-month (up 3.5 % year-over-year), inventory-to-sales ratios were up from 1.40 one year ago – and are now 1.36.

market expectations (from Bloomberg / Econoday) were for inventory growth of 0.0 % to 0.4 % (consensus +0.1 %).

The way data is released, differences between the business releases pumped out by the U.S. Census Bureau are not easy to understand with a quick reading. The entire story does not come together until the Business Sales Report (this report) comes out. At this point, a coherent and complete business contribution to the economy can be understood.