Wholesale Sales: Down Year-Over-Year for the Fourth Month in a Row (‘Recessionary Warning’?)

From the Census Bureau:

Sales. The U.S. Census Bureau announced today that April 2015 sales of merchant wholesalers, except manufacturers’ sales branches and offices, after adjustment for seasonal variations and trading-day differences but not for price changes, were $448.3 billion, up 1.6 percent (+/-0.7) from the revised March level, but were down 3.3 percent (+/-1.4%) from the April 2014 level. The March preliminary estimate was revised downward $0.6 billion or 0.1 percent.

Inventories. Total inventories of merchant wholesalers, except manufacturers’ sales branches and offices, after adjustment for seasonal variations but not for price changes, were $576.9 billion at the end of April, up 0.4 percent (+/-0.4%)* from the revised March level and were up 4.5 percent (+/-1.4%) from the April 2014 level. The March preliminary estimate was revised upward $0.2 billion.

This is the fourth straight month of declining year-over-year sales:

This indicates that the early-month wholesale economy in 2015 was significantly smaller than it was in 2014. Wholesale sales are roughly 30 percent of GDP (about $5.5 trillion out of $17.7 trillion).

The above is evidence that the reported first-quarter GDP decline is, if anything, still understated.

Meanwhile, April 2015 seasonally adjusted inventories were up 4.5 percent from April 2014 despite a related sales decline of 3.32 percent. If you were running a business, unless you somehow knew that sales were going to come back, you’d be cutting inventories, not expanding them.

____________________________________

UPDATE: Zero Hedge, with an accompanying graph, calls the continued year-over-year sales declines a “recessionary warning.”

UPDATE 2: Seasonally adjuted sales are down 4.4 percent from their July 2014 peak.