US business inventories unchanged in July

The Commerce Department says the unchanged reading in business inventories follows a 0.1 per cent dip in June. PHOTO: REUTERS

Published Thu, Sep 14, 2023 · 10:45 PM

US BUSINESS inventories were unchanged in July as companies continued to carefully manage stocks in anticipation of weak demand because of higher interest rates.

The unchanged reading in business inventories followed a 0.1 per cent dip in June, the Commerce Department said on Thursday (Sep 14).

Economists polled by Reuters had expected inventories to edge up 0.1 per cent. Inventories, a key component of gross domestic product, increased 1.4 per cent on a year-on-year basis in July.

Private inventory investment declined in the second quarter, imposing a small drag on gross domestic product growth. The economy grew at a 2.1 per cent annualized rate in the April-June period.

Retail inventories increased 0.2 per cent in July, instead of 0.3 per cent as estimated in an advance report published last month. They rose 0.5 per cent in June.

Motor vehicle inventories climbed 0.8 per cent, rather than 0.9 per cent as estimated last month. They increased 1.3 per cent in June.

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Labor Department shows initial claims for state unemployment benefits rose to a seasonally adjusted 220,000 for the week ended Sep 9 from 217,000 the prior week.

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In the US, petrol prices accelerated in August, peaking at US$3.984 per gallon in the third week of the month.

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The net share of owners reporting higher nominal sales in the past three months falls to a three-year low of minus 14 per cent.

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Consumers are growing more concerned about their ability to tap credit, with the share of households saying it is either much harder or somewhat harder to access credit now.

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A reading above 50 indicates growth in the services industry, which accounts for more than two-thirds of the economy.

US services sector picked up in August, along with prices

The shortfall in goods and services trade grows to US$65 billion from a revised US$63.7 billion in the prior month, according to Commerce Department data.

US trade deficit widened by less than expected in July

New orders for factory goods fall by 2.1 per cent in July after rising by 2.3 per cent in June, the US government says.

US factory orders fall 2.1% in July

Since last November, the PMI has been stuck below the 50 threshold, which indicates contraction in manufacturing, the longest such stretch since the 2007-2009 Great Recession.

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Retail inventories excluding autos, which go into the calculation of GDP, were unchanged instead of gaining 0.1 per cent as previously reported.

Wholesale inventories fell 0.2 per cent while stocks at manufacturers edged up 0.1 per cent.

Business sales rebounded 0.6 per cent in July after falling 0.2 per cent in June. At July’s sales pace, it would take 1.39 months for businesses to clear shelves, down from 1.40 months in June. REUTERS

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