Wholesale and Retail Inventories Rise Led by Autos: Diving Into Seasonal Adjustments


On Monday, Census Department data showed durable-goods orders declined 1.1% for the month.

by Mish

Yet, despite falling sales and a warning from GM, durable goods orders for autos and auto parts rose 1.2% in May. That was on top of a 0.5% gain in April.

The auto mystery continues as today’s advance trade data from the Census Department shows Wholesale inventories rose 0.3% and retail inventories rose 0.6%. The auto-related details were even more interesting.

Auto imports for the past two months are down a total of 4.6%. Auto exports for the past two months are up a net total of 0.7%.

This helped the balance of trade data but for the quarter, the balance of trade is still negative as noted in Trade Deficit Narrows as Exports Rise and Imports Drop: 2nd Quarter Trade Impact Still Negative.


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Adjusted vs. Unadjusted Numbers

  • Unadjusted, merchant inventories -0.9% in May and -0.9% in April
  • Adjusted, merchant inventories +0.4% in May and -0.3% in April
  • Unadjusted, retail inventories -0.7% in May and -0.4% in April
  • Adjusted, retail inventories +0.6% in May and -0.2% in April
  • Unadjusted, retail motor vehicles -1.0% in May and -0.1% in April
  • Adjusted, retail motor vehicles +1.1% in May and -0.2% in April

That’s a 2.1 percentage point difference between motor vehicle inventories in May, adjusted vs. unadjusted.

Manufacturers’ Motor Vehicles and Parts Inventories, Seasonally Adjusted vs Unadjusted

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The above chart shows manufacturers’ inventories of motor vehicles and parts.

The swings in deal inventories, month-over-month, unadjusted vs seasonally adjusted for the month of May are not wild.

Fred does not have the data I was looking for, retail trade motor vehicles and parts inventories seasonally adjusted and unadjusted.

I will do a followup report with data from the Census Bureau.

Auto Sales vs. Inventory Build

  1. June 26: GM Says “Market is Definitely Slowing” Lowers Outlook for Vehicle Sales
  2. June 1: Motor Vehicle Sales Flat, Hope Turns to Second Half: What About Fleet Sales? Incentives?
  3. May 2: Auto Sales Puke Again: Year-Over-Year Totals: GM -6%, Ford -7.2%, Toyota -4.4%, Fiat-Chrysler -7.0%
  4. April 3: Auto Sales Final Numbers: Down 5.7%, Two-Year Low; Don’t Worry, It’s Just a Plateau!

Despite slow sales, auto inventories are building.

If these numbers hold, inventories will likely, but not necessarily, add to second-quarter GDP.

For the inventory valuation discussion, please see GDP Estimation Crapshoot: When Errors Balance Out and When They Don’t

Mike “Mish” Shedlock


Global Economics