|Release Date:||Usually released 45 days after the end of the month being reviewed|
|Release Time:||Usually at 11:00am Eastern US time|
|Released By:||The US Census Bureau|
The Business Inventories report is issued by the US Census Bureau, and measures the change in the total value of goods in dollar terms held in inventory by manufacturers, retailers and wholesalers across the United States.
Business inventories refer essentially to the dollar value of all products that are in stock, which are available for sale to either other businesses or the end consumer. When tracked alongside a sales index, production activity in the near term can be predicted.
Time of Release
The Business Inventories data is usually released 45 days after the end of the month being reviewed. This means that if the month of January is being reviewed, the data for that month will be out sometime in March. The release time is usually at 11am Eastern US time.
Information about this news release is usually obtained from the website of the US Census Bureau, a unit in the US Department of Commerce. The release is provided in PDF format. Other independent news agencies such as Bloomberg and Thomas Reuters also carry the news release live.
Interpreting the Data
Obviously, if a manufacturer, wholesaler or retailer have more goods in stock than they are able to sell in the supply chain, this is not a good sign. It means that they are not doing enough business. It also means that consumers are not buying, so it is a good indicator of assessing the consumer spending patterns in the United States. Business inventories is also a measure future spending by businesses because wholesalers and retailers are more likely to purchase goods once they have depleted inventories, and manufacturers are more likely to purchase raw materials or produce more goods once their stocks are running out.
So if the actual business inventories figure comes in less than expected, this is a USD positive scenario. If the business inventories figure is more than the consensus number, then this is likely to lead to a fall in the value of the USD.
As a trading indicator, this report carries moderate market impact. It is therefore not a directly tradable indicator, but more of a predictive and analytical indicator, used in measuring consumer sentiment, consumer spending, retail sales and manufacturing data.
When business inventories are tracked along with sales data, traders can predict the pattern and direction of the future demand for produced goods. If, inventory growth trails sales growth, there will be an increase in the demand for production, which creates economic growth. When there is excess inventory with reduced sales, production will naturally slow down.
The data sheet of the news release will show several tables:
- Estimated Monthly Sales and Inventories for Manufacturers, Merchant Wholesalers and Retailers.
- Percentage changes for sales and inventories – manufacturers, wholesalers and retailers.
- Estimated monthly retail sales, inventories and sales/inventories ratios, by kinds of business. Values are in millions of US dollars.