Wholesale inventroies contracted 0.3 percent for a second straight month in June pulled down by lower prices for petroleum-related goods. Inventories of nondurable goods fell 0.7 percent in dollar terms in June following a 1.4 percent drop in May. Yet inventories of durable goods at the wholesale level were also down in June, but only marginally at 0.1 percent that followed a 0.4 percent build in May.

Wholesale inventories are expected to increase 0.1 percent in the advance report for June that would follow no change in May.

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.