US wholesale inventories revised lower in June

WASHINGTON (Reuters) – U.S. wholesale inventories fell more than initially estimated in June, which could have implications for the second-quarter gross domestic product estimate.

The Commerce Department said on Tuesday that wholesale inventories dropped 0.5% instead of falling 0.3% as previously reported last month. Stocks at wholesalers declined 0.4% in May.

Economists polled by Reuters had expected that inventories would be unrevised. Inventories are a key part of gross domestic product. They increased 1.3% on a year-on-year basis in June.

Private inventory investment was estimated to have made a small contribution to gross domestic product in the second quarter after being a major drag in the first three months of the year. The economy grew at a 2.4% annualized rate in the April-June quarter. The careful inventory management amid expectations of weaker demand because of higher borrowing costs is hampering production at factories.

Wholesale motor vehicle inventories increased 1.1% in June after advancing 1.6% in May. There were big decreases in wholesale stocks of metals, lumber, petroleum, farm products, apparel and chemicals.

Excluding autos, wholesale inventories fell 0.7% June. This component goes into the calculation of GDP.

Sales at wholesalers decreased 0.7% after dropping 0.5% in May. At June’s sales pace it would take wholesalers 1.41 months to clear shelves, up from 1.40 in May.

(Reporting by Lucia Mutikani; Editing by Andrea Ricci)