The U.S. Census Bureau said Tuesday business inventories for manufacturing and trade were $1,869.3 billion, up 0.5% (±0.1%) from May 2017. Manufacturers’ and trade inventories, adjusted for seasonal variations but not for price changes, are 2.8% (±0.2%) higher than levels in June 2016.
Sales, also adjusted for seasonal variations but not for price changes, were estimated at $1,356.8 billion, up 0.3% (±0.2%) from May 2017. They are up 4.3% (±0.4%) from June 2016.
The total business inventories/sales ratio based on seasonally adjusted data was 1.38, down slightly from the 1.40 in the end of June 2016. This could be fueled by a supply that is exceeding demand or by businesses stocking up on inventories in anticipation of a stronger economy.
Worth noting, the higher-than-expected headline is likely to lift second-quarter gross domestic product (GDP) revision estimates, which were already likely to get a big boost from the upward revisions in today’s very positive retail sales report.