US July Wholesale Inventories Rise 1.3% Month-on-Month, Seen Boosting Third-Quarter Growth
Macro
US wholesale inventories jumped 1.3% in July from the previous month, the Commerce Department said on the 10th, with no revision from the preliminary estimate. Inventories are a key component of gross domestic product; they rose 0.4% in June and were up 5.7% in July from a year earlier. Business inventories have been drawn down for five straight quarters amid solid domestic demand, and in the second quarter they subtracted 0.72 percentage points from GDP growth. Second-quarter economic growth came in at an annual rate of 1.5%, but the outlook for growth in the July-September period is currently running well above a 2% annual pace. In July, durable goods inventories rose 1.1%, driving the surge in wholesale inventories, while nondurable goods inventories increased 1.6% and petroleum inventories rose 6.5%. Wholesale sales rebounded 0.8% from the previous month, reversing a 2.9% decline in June. At July's sales pace, it would take 1.20 months to clear all inventories, up from 1.19 months in June.
