Business Inventories

The Business Inventories report quantifies the total inventories maintained by manufacturers, wholesalers, and retailers across the nation. It serves as an economic indicator that provides insights into inventory levels in various sectors and their potential effects on the economy.

What is Business Inventories data? The Business Inventories report is a monthly assessment of the dollar value of inventories held by manufacturers, wholesalers, and retailers in the United States. The purpose of this report is to track changes in domestic retail trade, wholesale trade, and manufacturing activities in a broad and timely manner. It is the sole report that offers monthly data on the total business conducted by retailers, wholesalers, and manufacturers.

Inventories are a crucial element of the economy, representing goods that have been produced but remain unsold. The report encompasses all three stages of the supply chain—manufacturing, wholesale, and retail—providing a thorough overview of inventory levels and trends. The data is presented in terms of both the absolute dollar value of inventories and the inventory-to-sales ratio, which compares inventory levels to corresponding sales figures for the same period.

Why is Business Inventories data important? The Business Inventories report is regarded as a significant economic indicator, as inventory levels can greatly impact the economy. Elevated inventory levels may suggest weak demand or overproduction, potentially leading to decreased production, layoffs, or price reductions in the future. Conversely, low inventory levels may indicate strong demand or underproduction, which could result in increased production, hiring, or price hikes.

By observing inventory levels and trends, economists, investors, and policymakers can assess the overall health of the economy and make informed decisions based on current conditions. Traders also consider how retail inventory figures will affect interest rates. If inventories are increasing at a faster rate than sales, it typically signals an economic slowdown. A slowing economy often leads to lower interest rates, which is bearish for the dollar. Conversely, if both sales and inventories are rising at the retail, wholesale, and manufacturing levels, it is considered bullish for the dollar.

The Bureau of Economic Analysis incorporates this data into GDP estimates and the leading economic indicator series. Additionally, the Federal Reserve Board, the Treasury Department, and the Council of Economic Advisers utilize this data to guide monetary and fiscal policy.

Who publishes Business Inventories? The Business Inventories report is generated by the U.S. Census Bureau, a division of the Department of Commerce. The Census Bureau is tasked with collecting, analyzing, and disseminating economic data related to various facets of the U.S. economy, including business inventories. The report is based on data gathered through the Monthly Retail Trade Survey, the Monthly Wholesale Trade Survey, and the Manufacturers’ Shipments, Inventories, and Orders Survey.

When is the Business Inventories report released? The Business Inventories report is generally released on a monthly basis, around the middle of the month. For instance, the report for January would be published in mid-March. The Census Bureau makes the report available on its website, ensuring easy access for the general public.