Inventories at the wholesale level fell 1.4% in July as sales increased 0.5%, the largest rise since June 2008, the Commerce Department reported Friday.
The drop in inventories follows a downwardly revised 2.1% drop in June — a record decline in monthly inventories. Inventories have declined for 11 consecutive months.
The ratio of inventories to sales, a measure of how quickly wholesalers are moving goods, fell to 1.23 from 1.25 in June. The ratio was 1.13 in July 2008.
Economists had expected inventories to drop 1.0% and for sales to increase 0.5%, according to the median estimate from Thomson Reuters.
Sales increased for the third consecutive month, while June sales were downwardly revised to a 0.3% increase.
Wholesale durable goods inventories fell 1.5% in July and 1.8% in June. Automotive goods dropped 2.0% in July.
Inventories of professional equipment fell 1.2% as its inventories-to-sales ratio fell to a record low of 1.00.