WASHINGTON — The value of business inventories in July was up 0.6%, as expected by analysts and the MNI calculated prediction, data released by the Commerce Department Friday morning showed.
Retail inventories rose 0.5%, revised up from the 0.4% gain in the advance estimate. Data from the wholesale inventory report showed a 0.6% rise in the month, which was revised down from the 0.7% gain in the advance report, while factory inventories were up 0.8%.
According to an MNI calculation, if a 1.2% increase in motor vehicle inventories had been excluded, total business inventories would have been still been up 0.6% in July. The increase in motor vehicles inventories was revised up from a 1.0% gain in the advance estimate.
After excluding the increase in motor vehicle inventories, the remaining retail categories were up 0.1%, unrevised from the advance estimate. There were increases for furniture, building materials, general merchandise stores and food and beverage stores. These were offset by a decline at clothing stores.
The relatively large unpublished retail category fell 0.4% following a 0.1% decrease in June, according to an MNI calculation.
July business sales posted a 0.2% increase in the month, above the 0.1% rise forecast by MNI after the wholesale data were released, but before the upward revision to July retail trade sales released earlier Friday morning.
Retail sales excluding food services rose 0.5% in July, revised up from the 0.4% gain reported last month. There were previously announced flat readings for factory shipments, which are equal to sales in this report, and wholesale sales.
The inventory-to-sales ratio rose to 1.34 in July from 1.33 due to the smaller gain in sales than in inventories this month. The ratio remains well below the 1.39 level seen in July 2017, as sales growth has sharply outpaced inventory growth over the last year.
The large July gain in business inventories is a positive factor for the start of the third quarter, but it remains to be seen whether inventory growth slows over the next two months.
