Business Inventories Buildup Brings Weaker Expectations
The Commerce Department reported on Wednesday that Business Inventories were up by 0.4% for the month of June. The consensus estimate of economists polled by Bloomberg was spot on at 0.4%, and the range of estimates was 0.3% to 0.6%.…
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The inventory-to-sales ratio was unchanged at 1.29. Nationwide, business inventories posted gains in each month of the second quarter.
The month-to-month change in retail inventories for June was 0.5%, coupled with only a 0.2% increase in sales. This raised the inventory-to-sales ratio to 1.42 from 1.41.
For comparison, in May, business inventories rose 0.5% and business sales rose by 0.4%. The inventory-to-sales ratio remained unchanged at 1.29.
Elsewhere on Wednesday, the Commerce Department said July retail sales were flat at 0.0% growth. A lack of sales growth has resulted in the backup of inventories for the month of July. There was also a lower buildup of wholesale inventories reported last week.
The flat growth in July retail sales and the buildup in retailer inventories from the prior month, may prove to increase an inventory glut if retail sales do not pick up in the next couple of months. In short, this could all bring about lower GDP estimates ahead.
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Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics. Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications. A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.
