US wholesale July inventories revised slightly lower
Inventories advanced 0.4% on a year-on-year basis in July
US WHOLESALE inventories increased less than initially thought in July amid a sharp rebound in sales, casting doubt on whether inventory investment would contribute to economic growth in the third quarter.
The Commerce Department’s Census Bureau said on Monday (Sep 9) that wholesale inventories rose 0.2 per cent, revised down from the 0.3 per cent gain estimated last month. Stocks at wholesalers were unchanged in June.
Economists polled by Reuters had expected that the rise in inventories, a key part of gross domestic product, would be unrevised at 0.3 per cent. Inventories advanced 0.4 per cent on a year-on-year basis in July.
Private inventory investment contributed to the economy’s 3.0 per cent annualised growth rate in the second quarter. There is hope that inventories could offset some of the drag on GDP from a widening trade deficit this quarter.
The trade gap has increased as businesses boosted imports likely in anticipation of higher tariffs on goods.
Most of the imports could end up as unsold goods in warehouses. Attention now shifts to retail inventory data, scheduled to be released next week.
Wholesale motor vehicle inventories jumped 1.0 per cent after rising 0.7 per cent in June. Excluding autos, wholesale inventories gained 0.1 per cent in July. This component goes into the calculation of GDP.
Sales at wholesalers surged 1.1 per cent in July after declining 0.3 per cent in June. At July’s sales pace, it would take wholesalers 1.35 months to clear shelves, down from 1.36 months in June. REUTERS
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