Importance (A-F): This release merits a C-.
Source: The Census Bureau of the Department of Commerce.
Release Time: 08:30 ET around the 15th of the month (data for two
Raw Data Available At: www.census.gov.
The business inventories report includes sales and inventory statistics from
all three stages of the manufacturing process (manufacturing, wholesale, and
retail). But by the time it is released all three of its sales components and
two of its inventory components have already been reported. Because retail
inventory is the only new piece of information it contains, the market usually
ignores the business inventories report.
However, sometimes retail inventories swing enough to change the aggregate
inventory profile. This may affect the GDP outlook. When it does, the report can
elicit a small market reaction.
The aggregate sales figures are dated and they say little about personal
consumption. They are actually a good coincident indicator, but the market is
far more interested in forward-looking statistics.
The inventory-to-sales (I/S) ratio measures the number of months it would
take to deplete existing inventory at current sales rates. A relatively low
(high) I/S ratio may mean that manufacturers will have to build up (draw down)
inventory levels. Depending on the strength of final demand and the degree to
which recent inventory changes have been intended or unintended, this can have
an effect on the industrial production outlook. Note that this information is
much more useful to market economists than it is to other market