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US business inventories unchanged; retail stocks revised down
[WASHINGTON] US business inventories were unexpectedly unchanged in June as stocks at retailers dropped more than initially estimated, government data showed on Thursday.
The Commerce Department said the unchanged reading in business inventories followed a 0.3 per cent increase in May.
Inventories are a key component of gross domestic product. Economists polled by Reuters had forecast inventories would rise 0.1 per cent in June.
Retail inventories fell 0.3 per cent in June instead of dipping 0.1 per cent as estimated in an advance report published last month. Motor vehicle inventories declined 0.5 per cent in June, rather than falling 0.3 per cent as previously reported.
Retail inventories excluding autos, which go into the calculation of GDP, slipped 0.1 per cent as reported last month.
The government in its advance GDP report last month said inventories subtracted 0.86 percentage point from economic growth in the second quarter. That resulted in the economy growing at an 2.1 per cent annualised rate, a slowdown from the first quarter's brisk 3.1 per cent pace.
But economists expect the government will trim its second-quarter GDP growth estimate after data on June construction spending and wholesale inventories came in lower than what the government had assumed in the advance GDP report.
Wholesale inventories were unchanged in June. Stocks at manufacturers rose 0.2 per cent. Inventory accumulation is slowing following a surge in consumer spending in the second quarter. Businesses are also carefully managing stock levels because of the darkening economic outlook, triggered by trade tensions between the United States and China.
Business sales edged up 0.1 per cent in June after dipping 0.1 per cent in the prior month. At June's sales pace, it would take 1.39 months for businesses to clear shelves, down from 1.40 in May.