Wholesale inventories in the U.S. fell 0.2% in July, the Commerce Department said Friday. It is the second straight monthly decline.
Economists polled by the Wall Street Journal expected a 0.1% fall.
Sales jumped 0.8% in July, completely reversing a 0.8% decline in June. It was the first monthly gain in sales after four straight declines and the largest increase in just over a year. Sales are still down 4.2% compared with July 2022..
The inventory-to-sales ratio fell to 1.39 months in July from 1.41 months in the prior month. This is the lowest ratio since February. The ratio has been steadily increasing from a much lower 1.33 months in July 2022.
Economists are watching the inventory-to-sales ratio closely.
Higher inventories could push companies to lower their prices, which would cool inflation, said Eugenio Aleman, chief economist at Raymond James. At the same time, unwanted backlogs might also signal a slowdown in the economy, he added.
Stocks
DJIA
SPX
opened higher on Friday. The 10-year Treasury note yield
BX:TMUBMUSD10Y
fell slightly to 4.23%.
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