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US wholesale inventories rise more than expected in June
[WASHINGTON] US wholesale inventories unexpectedly rose in June on gains in stocks of farm products and other nondurable goods, suggesting an upward revision to the second-quarter economic growth estimate.
The Commerce Department said on Tuesday that wholesale inventories increased 0.3 per cent after having been initially estimated as unchanged. Inventories for May were revised up to show a 0.2 per cent rise instead of the previously reported 0.1 per cent gain.
Economists had forecast wholesale inventories unchanged in June in line with the government's estimate last month. That unchanged reading was incorporated in the advance second-quarter gross domestic product estimate published last month.
The component of wholesale inventories that goes into the calculation of GDP - wholesale stocks excluding autos - increased 0.3 per cent in June. That would imply a mild upward revision to the second-quarter GDP growth estimate.
An outright drop in inventory investment subtracted almost 1.2 percentage points from GDP growth in the second quarter, restricting the rise in output to a tepid 1.2 per cent annualized rate. Inventories have weighed on GDP growth since the second quarter of 2015 as businesses sell piles of unwanted goods.
In June, wholesale stocks of farm products increased 4.0 per cent after rising 6.2 per cent in May. Wholesale inventories of drugs surged 4.9 per cent after declining 3.8 per cent in May. Auto inventories dipped 0.1 per cent in June.
Sales at wholesalers jumped 1.9 per cent after rising 0.7 per cent in May. In June, it would have taken wholesalers 1.33 months to clear shelves, down from 1.35 months in May.