Wholesale inventories surged ahead of economists’ expectations in July, rising 1.3%, to post the largest increase in stockpiles in two years, the Commerce Department reported Friday.

Wholesale sales rose 0.6% to post the strongest gain in three months, Commerce said.

Economists expected inventories to grow by 0.4% and sales to expand by 0.2%, according to the median estimate from Thomson Reuters.

Inventories in June were revised to a 0.3% increase from the 0.1% gain initially reported last month, according to the Commerce Department.

Meanwhile, sales also increased after being revised higher to a 0.5% decline from 0.7%.

The wholesale inventories-to-sales ratio edged higher to 1.16 from a 1.15 ration in June.

Durable goods inventories increased 1.0% and apparel inventories jumped 4.1%, the largest increase since November 2004.

“Wholesale sales rose modestly while inventories climbed strongly, lifting the inventory-to-sales ratio slightly for the third consecutive month,” Steven A. Wood, chief economist at Insight Economics, said in a research note.

“Inventories appear to be broadly in balance with sales, although there has probably been some modest involuntary inventory building,” he said.

“The jump in inventories at the manufacturing and wholesale level in July suggest that [third-quarter gross domestic product] estimates will likely have to be revised higher,” Wood said.

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