Wholesale inventories rise in June, sales stall

8/9/04

WASHINGTON (Reuters) — Inventories at U.S. wholesalers rose more than expected in June as sales stalled, confirming a soft spot in the month, a Commerce Department report showed Monday.

Stocks on hand at wholesalers increased 1.1%, surpassing Wall Street expectations of a more modest 0.5% gain. Sales by wholesalers were flat, posting their weakest reading since a 0.2% decline in May 2003.

The gain in inventories and stagnant sales boosted the inventory-to-sales ratio, which measures how long it would take to draw down inventories at the current sales pace, to 1.15 months' supply from 1.13 in May.

Inventories of durable goods, items meant to last three years or more, rose 1.4% in June after an upwardly revised 1.9% May increase. Non-durable goods inventories rose a smaller 0.6%.

Wholesale inventories make up one-third of the data reported in the June monthly business inventories report, set for release Aug. 12.

Federal Reserve officials are set to meet Tuesday and are widely expected to raise their target for a key short-term interest rate by a quarter-percentage point to 1.5%, despite signs of an economic soft spot in June and weak jobs data in July.

Officials have said they should be able to pursue a "measured" campaign of interest rate rises as long as inflationary pressures remain subdued and the economy continues to grow.

Home Loans Articles, Mortgage Loans Articles, Financial News