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US wholesale inventories revised higher in July

[WASHINGTON] U.S. wholesale inventories rose 0.6 per cent in July as stocks for a variety of goods, including autos, posted gains. The Commerce Department said on Friday that wholesale inventories rose 0.6 per cent, matching the rise in each of the previous two months. The department last month reported that wholesale inventories rose 0.4 per cent in July.

Auto inventories increased 0.2 per cent in July after jumping 1.1 percent in June. Slowing demand for autos has left manufacturers with an inventory glut, but economists say demand is likely to increase as drivers in Texas and other states ravaged by hurricanes replace storm-damaged vehicles.

The component of wholesale inventories that goes into the calculation of gross domestic product - wholesale inventories excluding autos - rose 0.7 per cent in July.

Durable goods inventories rose 0.9 per cent, helped by a 1.1 per cent increase in stocks of machinery, the biggest rise in nearly three-and-a-half years. Inventories of electrical equipment rose 2.6 per cent.

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Inventory investment had a neutral impact on the second quarter's 3.0 per cent annualized GDP growth rate after subtracting 1.46 percentage points from growth at the start of the year.

Sales at wholesalers slipped 0.1 per cent after rising by a revised 0.6 per cent in June. Economists had expected sales to rise 0.4 per cent in July.

Motor vehicles sales slid 0.8 per cent in July after rising 0.2 per cent in June.

At July's sales pace, it would take 1.30 months to clear shelves, which was the highest since November 2016. That compared with 1.29 months in June. The inventories-to-sales ratio for motor vehicles rose to 1.80 months from 1.78 in June. That ratio has increased from 1.67 months in January.