The Business Times

US wholesale inventories gain revised lower in June

Published Wed, Aug 10, 2022 · 10:38 PM

US wholesale inventories increased less than initially thought in June as businesses slowed the replenishment of their stocks as they continue to draw down on excess inventories amid softening consumer spending.

The Commerce Department said on Wednesday (Aug 10) that wholesale inventories rose 1.8 per cent, instead of 1.9 per cent as reported last month. Stocks at wholesalers advanced 1.9 per cent in May.

Economists polled by Reuters had expected June inventories would be unrevised. Wholesale inventories increased 25.5 per cent in June on a year-on-year basis.

Inventories are a key component of gross domestic product (GDP).

Wholesale motor vehicle inventories rose 2.6 per cent after rising 2.5 per cent in May. Wholesale inventories, excluding autos, increased 1.7 per cent in June. This component goes into the calculation of GDP.

The US economy unexpectedly contracted in the second quarter, with consumer spending growing at its slowest pace in 2 years and business spending declining. The second straight quarterly decline in gross domestic product largely reflected a more moderate pace of inventory accumulation by businesses.

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Business inventories increased at a strong clip in the first quarter just as consumer spending slowed, leaving excess stock to clear before more is ordered.

Sales at wholesalers rose 1.8 per cent in June after increasing 0.7 per cent in May. At June's sales pace it would take wholesalers 1.26 months to clear shelves, unchanged from May. REUTERS

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