2011 Economic Calendar
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Business Inventories  
Released On 10/14/2011 10:00:00 AM For Aug, 2011
PriorPrior RevisedConsensusConsensus RangeActual
Inventories - M/M change0.4 %0.5 %0.4 %0.1 % to 0.6 %0.5 %

Highlights
Careful inventory management is a plus for the economic outlook. Business inventories rose 0.5 percent in August, a bit ahead of a 0.3 percent rise in business sales but not enough to change the stock-to-sales ratio, at least out to two decimal points, which holds at 1.28. This reading indicates that inventory build is in line with sales growth.

Business inventories are broken into three components the third of which, retail inventories, is released with this report. Retail inventories rose 0.8 percent in August vs a 0.3 percent rise in sales but, like the total reading, the gain in inventories was not enough to change the stock-to-sales ratio which for this component is at 1.34. Note that today's very strong retail sales report justifies the August inventory build in the retail sector. Next readings on inventories will be a run of anecdotal data beginning with the Empire State report on Monday where manufacturing inventories in the region have been drawing down steeply.

Recent History Of This Indicator
Business inventories in July increased a moderate 0.4 percent against a 0.7 percent rise for business sales. The stock-to-sales ratio edged lower to 1.27 from June's 1.28. More recently, factory inventories gained 0.4 percent in August with wholesaler inventories also rising by the same percentage. These suggest a likely rise in overall business inventories for the month, baring a sharp decline in retail inventories.

Definition
Business inventories are the dollar amount of inventories held by manufacturers, wholesalers, and retailers. The level of inventories in relation to sales is an important indicator of the near-term direction of production activity. (Bureau of the Census)  Why Investors Care
 
[Chart]
Inventories tend to rise when economic conditions are strong; since sales are rising at the same time, the inventory-to- sales ratio may remain stable, or rise at a very slow pace. Inventories tend to drop when economic conditions are weak; since sales are falling at the same time, the inventory-to-sales ratio may remain relatively stable. The I- S ratio then begins to rise as sales fall more quickly than inventory growth.
Data Source: Haver Analytics
 
 

2011 Release Schedule
Released On: 1/142/153/114/135/126/147/148/129/1410/1411/1512/13
Release For: NovDecJanFebMarAprMayJunJulAugSepOct
 


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