The headlines say wholesale sales were up month-over-month with inventory levels remaining at levels associated with recessions. Our analysis shows an improving trend of the 3 month averages AND inflation adjusted data is now positive.

Note that Econintersect analysis is based on the change from one year ago.Econintersect Analysis:

Year-over-Year Sales – Unadjusted (blue line), Unadjusted but Inflation Adjusted (red line), 3 month Rolling Averages (yellow line)

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US Census Headlines based on seasonally adjusted data:

Wholesale Sales – Unadjusted – $ Millions

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Wholesale sales were at record highs for almost two years – until 2015 where they contracted year-over-year (and the contraction continues). Overall, the inventory-to-sales ratios (a rising ratio is an indicator of economic slowing) was high relative to past Februarys.

Unadjusted Inventory-to-Sales Ratio (blue line – left axis), Year-over-Year Change (red line – right axis)

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Year-over-year change in the inventory-to-sales ratio is what is important. A jump in the ratio which could indicate a slowing economy (one month of data is not a trend). A flat trend would indicate an economy which was neither accelerating or decelerating. A decelerating trend would indicate an improving economy. Since mid-2014 there has been a general deterioration of the inventory-to-sales ratio indicating a slowing economy.