U.S. wholesale inventories increased less than originally thought in July as companies slowed replenishment of their inventory.
According to a report, Commerce Department said on Friday that wholesale inventories increased by 0.6%, instead of 0.8% as reported last month. Stocks at wholesalers advanced 1.8% in June.
Economists believed that July inventories to remain unchanged. Wholesale inventories grew by 25.1% in July on a year-on-year basis.
Inventories constitute a major part of gross domestic product.
Wholesale inventories of motor vehicles rose 1.7% after increasing 3.0% in June. Wholesale inventories, not including autos, rose 0.5% in July. This factor is used in the calculation of GDP.
The U.S. economy unexpectedly contracted during the second quarter, at odds with a robust labor market. The drop was mainly due to the effects of the excess inventory accumulation by companies late last year, causing stocks to be cleared before any more is ordered at a period where consumer spending has slowed.
Sales at wholesalers fell 1.4% in July after increasing 1.6% in June. At July’s sales pace it would take wholesalers 1.29 months to clear shelves, up from 1.26 in June.
This story originally appeared on Reuters.
