The Commerce Department said Tuesday that business stockpiles were flat in June compared with May. Inventories had fallen a slightly 0.1 per cent in May. Sales rose 0.2 per cent in June after a solid 1.1 per cent increase in May.
The stagnant level for stockpiles could be setting the stage for inventory rebuilding in coming months. That would support increased factory production and overall economic growth in the second half of this year.
Business stockpiles in June stood at a seasonally adjusted $1.66 trillion, 3.5 per cent higher than a year ago. Inventories at the manufacturing and retail levels both rose 0.1 per cent. Stockpiles at the wholesale level fell 0.2 per cent, the third consecutive decline.
June's sales increase was led by solid gains at the retail and wholesale level. But sales by manufacturers declined 0.4 per cent.
A separate report Tuesday showed that retail sales advanced a modest 0.2 per cent in July. But a "core" category that excludes volatile auto, gas and business supply products, surged 0.5 per cent, the strongest such advance since a similar gain in December.
The government estimated last month that the economy grew at a lacklustre 1.7 per cent annual rate from April through June. Economists think the growth rate will be revised up because a report last week showed that U.S. companies exported a record number of goods in June. Some analysts think the revision could increase estimated growth in the April-June period to an annual rate of around 2.3 per cent.
Many economists predict that growth will rebound further to a rate of about 2.5 per cent in the second half of this year.Suggest a correction