The Business Inventories report measures the total amount of inventories held by manufacturers, wholesalers, and retailers in the country.
It is an economic indicator that offers insights into inventory levels across various industries and their potential implications for the economy
What is Business Inventories data?
The Business Inventories report is a monthly measure of the dollar value of inventories held by manufacturers, wholesalers, and retailers in the United States.
The goal of this report is to measure changes in domestic retail trade, wholesale trade, and manufacturers’ activities in a broad and timely way.
It is the only report where you can get monthly information about the total amount of business done by retailers, wholesalers, and manufacturers.
Inventories are an essential component of the economy, as they represent goods that have been produced but not yet sold. The report covers all three stages of the supply chain – manufacturing, wholesale, and retail – providing a comprehensive view of inventory levels and trends.
The data in the report is expressed both in terms of the absolute dollar value of inventories and as the inventory-to-sales ratio, which compares inventory levels to the corresponding sales figures for the same period.
Why is Business Inventories data important?
The Business Inventories report is considered an important economic indicator, as inventory levels can have significant implications for the economy.
- High inventory levels may indicate weak demand or overproduction, which could lead to reduced production, layoffs, or price cuts in the future.
- Low inventory levels may indicate strong demand or underproduction, potentially resulting in increased production, hiring, or price increases.
By monitoring inventory levels and trends, economists, investors, and policymakers can gauge the overall health of the economy and make informed decisions based on current conditions.
Traders also look at how retail inventory numbers will influence interest rates.
If inventories are rising at a faster pace than sales, this usually indicates that the economy is slowing down. A slowing economy means lower interest rates, which is dollar bearish.
It is considered dollar bullish if both sales and inventories are rising at the retail, wholesale, and manufacturing level.
The Bureau of Economic Analysis uses the data in GDP estimates and the leading economic indicator series. The Federal Reserve Board, the Treasury Department, and the Council of Economic Advisers use the data to inform monetary and fiscal policy.
Who publishes Business Inventories?
The Business Inventories report is produced by the U.S. Census Bureau, a division of the Department of Commerce.
The Census Bureau is responsible for collecting, analyzing, and disseminating economic data related to various aspects of the U.S. economy, including business inventories.
The report is based on data collected 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 typically released on a monthly basis, around the middle of the month.
For example, the report for January would be released in mid-March. The Census Bureau publishes the report on its website, making it easily accessible to the general public.