The ratio of inventories to sales edged slightly higher on a seasonally adjusted basis in June as sales for all U.S. businesses declined 0.6 percent from May while inventories rose by 0.3 percent, the U.S. Census Bureau reported Aug. 13. The inventories-to-sales ratio was 1.26, barely higher than the 1.25 ratio in May but much lower than the 1.37 ratio posted in June 2009.
The lower ratio this June results entirely from improved sales. Inventories actually were 0.2 percent higher in June than in June 2009, but sales were 9.2 percent higher in June than a year ago.
The inventories-to-sales ratio is a key indicator of near-term trucking activity. As inventories drop relative to sales, businesses typically order more components and finished goods. As inventories rise relative to sales, businesses typically slow orders.