Based on wholesaler info, inflation shouldn't keep going up so much.

Ahead of a big inflation reading, we found out today that among wholesalers sales and inventories both were up quite a bit in March.

Sales
March 2022 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 $686.2 billion, up 1.7 percent (±0.5 percent) from the revised February level and were up 22.1 percent (±1.1 percent) from the revised March 2021 level. The January 2022 to February 2022 percent change was revised from the preliminary estimate of up 1.7 percent (±0.4 percent) to up 1.5 percent (±0.4 percent).

Inventories
Total inventories of merchant wholesalers, except manufacturers’ sales branches and offices, after adjustment for seasonal variations and trading day differences, but not for price changes, were $840.3 billion at the end of March, up 2.3 percent (±0.2 percent) from the revised February level. Total inventories were up 22.0 percent (±1.4 percent) from the revised March 2021 level. The February 2022 to March 2022 percent change was unrevised from the advance estimate of up 2.3 percent (±0.2 percent).

When you’re seeing higher inventories to match higher sales, that’s not an indication that supplies are getting tighter, and the inventory-to-sales ratio across all goods was basically the same over those 12 months (1.23 in March 2021, 1.22 in March 2022).

In fact, several categories of goods are more available this year than the last.

The groceries stat should raise your eyebrows, given the significant increase in food prices over the last year. We should be seeing that ratio going the other way, if prices are rising like they are.

The one area where supplies had become noticeably tighter in early 2022 vs early 2021 was in petroleum products, where the increased dollar amount of sales (66.7%) was more than triple the increase in the dollar amount of inventories (21.1%). But even then, that merely continued a trend that had started last year, and we have the same amount of gasoline (based on amount of usage) available in this country as we did this time last year, and more than we had in the years before COVID was a thing.

Keep these numbers in the back of your mind as we await the release of the Consumer Price Index figures for April, which happens tomorrow. In theory, more available supplies at the wholesale level should start translating to a moderation in price increases for consumers within a month or two. So let’s see if that’s actually happening, or if someone in the middle is taking big profits at the expense of the rest of us.