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U.S. June wholesale inventories revised higher

Kitco News

WASHINGTON (Reuters) - U.S. wholesale inventories were slightly higher in June than previously reported, with sales posting their biggest drop in five months.

The Commerce Department said on Thursday wholesale inventories edged up 0.1 percent instead of being unchanged as it reported last month. Stocks at wholesalers rose 0.3 percent in May. They increased 5.1 percent year-on-year in June.

The component of wholesale inventories that goes into the calculation of gross domestic product - wholesale stocks excluding autos - gained 0.2 percent in June.

There was an outright inventory liquidation in the second quarter. As a result inventories subtracted a full percentage point from gross domestic product in the April-June quarter. The economy grew at a 4.1 percent annualized rate during that period, the fastest in nearly four years.

Against the backdrop of strong domestic demand, businesses are likely to boost stocks of goods, which should underpin production at factories. Economists expect a significant contribution from inventory accumulation to GDP growth in the third quarter.

In June, wholesale auto inventories fell 1.2 percent after declining 1.5 percent in May. Machinery inventories increased 0.8 percent after May’s 1.7 percent surge. Stocks of farm products tumbled 6.5 percent after dropping 2.6 percent in May.

Sales at wholesalers dipped 0.1 percent in June, the largest drop since January, following a 2.1 percent jump in May. At June’s sales pace it would take wholesalers 1.25 months to clear shelves, unchanged from May.

Reporting by Lucia Mutikani, Editing by Andrea Ricci

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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