- US business inventories for December 2021 2.1% vs estimate of +2.1%.
- Business inventories year on year 10.5%
- Prior month business inventories 1.3%
- US business sales -0.7% vs 0.7% last month.
- Year on year business sales were up 15.9%.
- Inventory/sales ratio rose to 1.29 from 1.25 last month. The inventory to sales ratio in December 2020 was at 1.35 months
The rise in the inventory to sales ratio is positive given the supply constraints but still remains below year ago levels at 1.35 months. The December sales decline was congruent with the retail sales report from December as consumers likely frontloaded Christmas purchases due to concerns about supply.
Nevertheless, the inventory sales ratio is still near lower levels historically (see chart above) a more normal level would be 1.35 to 1.45.
The retail sales report released earlier today suggests that the sales number will reverse higher next month. How will inventories react?
US stocks remain under pressure with the NASDAQ index now down -163 points or -1.16%. The Dow industrial average is down just over 200 points, while the S&P index is down -0.69% or -30.64 points on the day.
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