March Wholesale Inventories rose .4%, a touch below expectations of a gain of .5% and with a 2.4% rise in sales, the inventory to sales ratio fell to a record low of 1.13 months down from 1.16 in Feb. Thus, while we’ve seen a big reversal in the absolute level of inventory drawdowns that has lifted GDP over the past 4 quarters, the restocking that typically follows in past recoveries has been muted. Of course though, the backdrop is very positive for production if the pick up in end demand becomes sustainable. Auto inventories at the wholesale level rose for a 2nd straight month but are still down 11.2% y/o/y. Inventories of computers rose for the 6th month in the past 7 and are up 10.7% y/o/y but the sales of computers are up 15.4% y/o/y. Wholesale inventories of machinery fell for the 14th straight month.
