U.S. Wholesale Inventories Unexpectedly Edge Lower In July

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Wholesale inventories in the U.S. unexpectedly saw a modest decrease in the month of July, according to a report released by the Commerce Department on Thursday.

The report said wholesale inventories edged down by 0.1 percent in July following a downwardly revised 0.7 percent increase in June.

The drop came as a surprise to economists, who had expected inventories to rise by 0.3 percent compared to the 0.9 percent increase originally reported for the previous month.

The unexpected decrease reflected a pullback in inventories of non-durable goods, which fell by 0.5 percent in July after jumping by 1.9 percent in June.

The Commerce Department pointed to steep drops in inventories of petroleum and petroleum products and drugs and druggists' sundries.

On the other hand, the report said inventories of durable goods edged up by 0.1 percent in July after coming in nearly unchanged in June.

An increase in inventories of motor vehicles, parts and supplies was partly offset by a decrease in inventories of metals and minerals.

The report also showed a pullback by wholesale sales, which dipped by 0.3 percent in July after climbing by 0.4 percent in June.

The decrease came as a 1.7 percent drop in sales of non-durable goods more than offset a 1.2 percent increase in sales of durable goods.

With inventories and sales both showing modest decreases, the inventories/sales ratio for merchant wholesalers came in at 1.30 in July, unchanged from the previous month.

Next Tuesday, the Commerce Department is scheduled to release a separate report on total business inventories and sales in the month of July.

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