WASHINGTON, Sept 9 (Askume) – U.S. wholesale inventories rose less than initially expected in July despite a surge in sales, raising questions about whether inventory investment will help spur economic growth in the third quarter.
The U.S. Commerce Department’s Census Bureau said on Monday that wholesale inventories rose 0.2%, below the 0.3% forecast for the previous month. Wholesalers’ inventories remained unchanged in June.
Economists polled by Askume had expected the increase in inventories, a key component of gross domestic product, to remain unchanged at 0.3%. Inventories rose 0.4% year-on-year in July.
Private inventory investment contributed 3.0% to annual economic growth in the second quarter. The pressure on GDP due to the widening trade deficit is expected to ease somewhat in this quarter.
As businesses anticipate higher tariffs on goods, they increase imports and the trade deficit grows.
Most of the imported goods may remain unsold in warehouses. The focus now shifts to retail inventory data to be released next week.
Wholesale motor vehicle inventories rose 1.0% after rising 0.7% in June. Wholesale inventories excluding automobiles rose 0.1% in July. This portion is included in the calculation of GDP.
Wholesaler sales rose 1.1% in July after falling 0.3% in June. Based on July’s sales pace, it will take 1.35 months for wholesalers to empty stores, compared with 1.36 months in June.
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