June Wholesale Inventories Up 0.5 Percent

WASHINGTON -- Inventories on U.S. wholesalers' shelves rose 0.5 percent in June, slightly more than expected, mainly due to larger stocks of automobiles and nondurable goods, government data showed Wednesday.

Wholesale inventories rose to $398.5 billion in June, the Commerce Department said. Economists polled by Reuters forecast that wholesale inventories would rise 0.4 percent, Inventories also rose 0.5 percent in May.

Sales rose 0.6 percent to $359.5 billion after a 1.3 percent rise the previous month. The sales numbers were pulled up by gains in most categories.

Among the sectors posting the largest sales gains in June were professional equipment, computer equipment, apparel and drugs.

The stocks-to-sales ratio — a measure of how long it would take to deplete stocks at the current sales pace — was 1.11 month's worth in June, matching the record low set in May.

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Economists said when the ratio fell to its record low the inventory correction has brought stocks back to acceptable levels relative to sales, setting the stage for businesses to replenish their depleted stockpiles and, as a result, adding significantly to gross domestic product over the last three quarters of the year.

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