US June wholesale inventories revised lower

[WASHINGTON] US wholesale inventories were revised lower to show them unchanged in June, indicating a slowdown in the pace of inventory accumulation that could further weigh on economic growth.

The unchanged reading in wholesale inventories reported by the Commerce Department on Thursday was a downward revision to a 0.2 per cent gain estimated last month. Stocks at wholesalers rose 0.4 per cent in May. They advanced 7.6 per cent on a year-on-year basis in June.

The component of wholesale inventories that goes into the calculation of gross domestic product edged up 0.1 per cent in June.

While inventories increased further in the second quarter, the pace of accumulation was slower than early in the year. Some of the slowdown in the pace of inventory accumulation reflects a surge in consumer spending in the second quarter.

Businesses are also carefully managing stock levels as the economy's outlook continues to darken amid an escalation in the trade war between the United States and China, which has roiled financial markets.

Inventories subtracted from GDP growth in the second quarter. The economy grew at a 2.1 per cent annualised pace in the April-June period, slowing from the first quarter's 3.1 per cent rate.

In June, wholesale auto inventories slipped 0.2 per cent after increasing 1.6 per cent in the prior month. There were increases in professional equipment and machinery inventories. Hardware inventories fell by the most since October 2016.

Sales at wholesalers dropped 0.3 per cent in June after falling 0.6 per cent in May. Motor vehicle sales declined 0.2 per cent in June after increasing 2.6 per cent in May. At June's sales pace it would take wholesalers 1.36 months to clear shelves, unchanged from May.

REUTERS