Wholesaler Inventories-to-Sales Ratio Makes New Record Low

- Wholesale Inventories for May rose .5% versus estimates of a .4% gain and a .3% increase in April.

BOTTOM LINE: Sales at US wholesalers rose faster than inventories in May, making it more likely companies will place more orders and factories will increase production, Bloomberg said. Wholesaler sales surged 1.3% versus a 1.5% gain in April. The sales gain was pace by computer and furniture wholesalers, which each saw about 4% gains. The ratio of inventories to sales hit a new record low at 1.11 months’ supply at the current sales pace. Inventory de-stocking subtracted about 1 percentage point from GDP in the first quarter. The surge in furniture wholesaler sales is noteworthy considering the slowdown in housing. I continue to believe 2Q US growth will likely come in around 3%+ for 2Q before decelerating modestly this quarter.