U.S. wholesale inventories rebounded by more than expected in July following an unexpected drop in June, although July wholesale sales continued to fall following a precipitous drop in the previous month.
According to figures released by the Commerce Department on Wednesday, U.S. wholesale inventories were estimated at a seasonally adjusted level of $485.2 billion, up 0.7 percent from revised June levels.
The increase reflects a stronger than expected rebound from the 0.2 percent drop in June inventories - a level that was essentially unrevised from initial reports. Most economists had predicted a smaller 0.4 percent increase in wholesale inventories for the month.
On a year-over-year basis, U.S. wholesale inventories were up 5.3 percent.
Meanwhile, wholesale sales continued to drop in June, falling to a seasonally adjusted level of $402.4 billion, a 0.1 percent drop from revised June levels.
Although the drop marks the third consecutive month of declining wholesale sales, the 0.1 percent drop in July was far smaller than the 1.4 percent drop recorded in June.
Wholesale sales remain up 2.7 percent from July 2011 levels.
The increase in wholesale inventories was relatively equally spread among inventories of durable and non-durable goods, both of which showed a 0.7 percent increase in July.
Inventories of drugs were up precipitously, rising 2.2 percent, while machinery, professional equipment and furniture inventories all rose by 1 percent or more.
Automotive inventories as well as inventories or paper and groceries were also up at the wholesale level.
Wholesale inventories of apparel dropped the furthest in July, falling 1.3 percent, while hardware inventories fell 0.8 percent, petroleum and metals were down 0.7 percent and electrical inventories dropped 0.6 percent.
With inventories rising and sales falling, the inventories-to-sales ratio edged up 1.21 in July from 1.20 in June. The ratio came in at 1.18 in July of 2011.
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