Business sales slumped in March while inventories stayed steady, according to a Commerce Department report (link opens in PDF) released today.

Seasonally adjusted sales fell 1.1% to $1.27 trillion from February to March. A 1.6% drop in merchant wholesalers had the largest negative impact on March's numbers, but sales went red across the board. Manufacturers' sales decreased 1%, while retailers saw a 0.6% slide.

On the supply side, overall inventory levels remained unchanged from February. Although retailers saw a 0.5% inventory decrease, a 0.4% bump in merchant wholesalers' stocks offset hopes of an inventory squeeze.


To understand the rate at which goods are being made and sold, economists compute an inventories/sales ratio. Since sales fell and inventories remained unchanged from February to March, the inventories/sales ratio increased to 1.29 compared to the previous month's 1.28 value. The March 2012 ratio was 1.26.

Source: census.gov.

In the last 12 months, inventory growth has been more than double sales growth. Total business sales are up 1.8%, while inventories have increased 4.5%. Retailers have seen the largest spread, with sales up just 2.9% compared to a 7.3% jump in inventories.

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The article Business Sales Slump for March originally appeared on Fool.com.

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