Business Inventories Rise 0.2% in June

Inventories of unsold goods rose 0.2% in June, as stockpiles of cars and clothing grew, the Commerce Department reported Wednesday.

Companies have to sell off inventories before ordering more goods and having them delivered to restock warehouses or stores. So an inventory adjustment can distort normal flows of trucked freight.

The 0.2% increase matched the rise in May, and met analysts' expectations, Bloomberg said. Commerce said this was the first time inventories rose in back-to-back months since February 1999-January 2001.

Commerce also said wholesale stockpiles, which make up 25% of the report, rose 0.3% after being flat in May.



Sales by U.S. manufacturers, wholesalers and retailers rose 0.3% in June after declining by the same amount the month before.

The inventory-to-sales ratio, a measure of how long goods remain unsold, held steady at 1.36, just above the record-low of 1.35 months set in April.

Economists told Bloomberg companies are keeping a lid on costs, which includes keeping a tight rein on inventories, because of signs the recovery is moving very slowly. This may not change until they see a significant increase in sales.

Commerce said vehicle sales surged 4.2% because they were at affordable levels. However, inventories among vehicles dealers rose 0.9% in June, while inventories at clothing stores rose 1.3%.

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