Wholesale inventories continue to slip, falling 0.2 percent in April after March's 0.3 percent decline. Year-over-year, wholesale inventories were up 6.2 percent which is under March's 8.8 percent rise and far under prior annual builds that hit peaks of 25 percent mid-year last year.

Wholesale inventories in April would have been higher if not for nondurable goods which fell 1.1 percent on the month. Declines here reflect at least in part price effects tied to falling prices for petroleum and related products. Inventories of durable goods rose 0.4 percent in April versus March's 0.1 percent draw.

Today's inventory results which include a slowing build among retailers point to a slow start for the inventory component of second-quarter GDP, a component that pulled total GDP lower in the first quarter.

Wholesale inventories measure the monthly dollar value of inventories held by merchant wholesalers and are tracked to gauge inventory change in quarterly GDP. The advance report is released late in the month for the following month and is part of the Monthly Advance Economic Indicators report (which also includes data on retail inventories and international trade in goods). Final monthly data for wholesale inventories are released about two weeks later with the Wholesale Trade report which also includes initial monthly data on wholesale sales.

Investors need to monitor the economy closely because it usually dictates how various types of investments will perform. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers a slower rate of growth that won't lead to inflationary pressures. Wholesale inventory data give investors a chance to look below the surface of the visible economy, especially for unwanted build. If inventories are growing too fast relative to economic growth, then both production and employment will probably have to slow while those inventories are worked down.