RELEVANCE: The Inventory/Sales ratio, or the number of months of inventory on hand, measures how quickly manufacturing and whole and retail trade businesses read the direction of the economy. Businesses typically do not anticipate recessions and slowdowns in the economy, and during those periods inventory tends to accumulate relative to monthly sales.
MECHANICS: The inventory and sales data are collected by the U.S. Bureau of the Census through monthly surveys of manufacturers and whole and retail trade establishments. The sample is stratified by detailed industry and covers at least 3,000 establishments. The data is reported approximately 40 days after the close