|Release Date:||Usually released on a monthly basis 40 days after the month under review ends|
|Release Time:||At 10am US Eastern Time|
|Released By:||The US Census Bureau|
The Wholesale Inventories is a report released by the US Census Bureau that measures the change in the total value of goods held in inventory by wholesalers. In other words, wholesale inventories refer to the total value in the stock of unsold goods kept by manufacturing companies. The essence of this report is to tell market participants if companies are able to sell their goods faster or whether sales have slowed considerably to the point of leading to lots of unsold stock. A breakdown of the report also shows the degree of sales made by wholesalers in addition to their stock of unsold durable and non-durable goods.
The Wholesale Inventories report is an indicator of future business spending because retail companies are more likely to purchase more goods from wholesalers once they have depleted their inventories, and wholesalers can also order more goods from manufacturers once their stocks are depleted.
Time of Release
The Wholesale Inventories report is usually released on a monthly basis 40 days after the month under review ends. So a report which is to be released on May 9, 2014 will chronicle the situation for the month of March 2014. The time of release is 10am US Eastern Time. The data is released on the website of the US Census Bureau and also on independent news feeds from Bloomberg and Thomas Reuters.
Interpreting the Data
The Wholesale Inventories is a low impact news release and is therefore it is not capable of producing any tradable volatility on forex platforms. While it is not advisable to trade it directly as a news item, it is however very important as a leading indicator of manufacturing and retail sales.
Wholesale inventories excluding automobiles, are used in calculation of a nation’s Gross Domestic Product (GDP). A pile-up of unsold goods (increase in wholesale inventories) is a sign of economic stagnation, reduced consumer spending and will eventually lead to a drop in retail sales. This situation is USD negative. In contrast, a lower than consensus wholesale inventories number is seen as USD positive as it signals more consumer spending and better business for retailers and ultimately wholesalers.
It is also important to compare current figures with past ones. Is there a modest increase in the Wholesale Inventories figure, or is there a stagnation or outright drop? Also important in the calculation is the inventory-sales ratio. The pattern of the actual figures will give an indication of whether the economy is growing from the contribution of wholesaler activity or not.