| Consensus | Consensus Range | Actual | Previous | Revised | |
|---|---|---|---|---|---|
| Month over Month | 0.2% | -0.1% to 0.2% | 0.2% | 0.0% | |
| Manufacturing Inventories | 0.2% | 0.1% | |||
| Retail Inventories | 0.2% | 0.3% | 0.2% | ||
| Wholesale Inventories | 0.1% | -0.3% |
Highlights
Total business inventories are up 0.2 percent in June from May and match the consensus in the Econoday survey of forecasters.
Retail inventories are up 0.2 percent in June from May, but down 0.1 percent excluding motor vehicles and parts. Motor vehicles and parts inventories are up 1.0 percent in June following an increase of 0.6 percent in May. Dealers are stocking up on vehicles and parts in advance of expected increases in tariffs on imports and/or in anticipation of slowdowns along the supply chain.
Inventories at manufacturers are up 0.2 percent in June, a small uptick from up 0.1 percent in May. Wholesalers' inventories are up 0.1 percent in June after declining 0.3 percent in May.
Retail inventories are up 0.2 percent in June from May, but down 0.1 percent excluding motor vehicles and parts. Motor vehicles and parts inventories are up 1.0 percent in June following an increase of 0.6 percent in May. Dealers are stocking up on vehicles and parts in advance of expected increases in tariffs on imports and/or in anticipation of slowdowns along the supply chain.
Inventories at manufacturers are up 0.2 percent in June, a small uptick from up 0.1 percent in May. Wholesalers' inventories are up 0.1 percent in June after declining 0.3 percent in May.
Market Consensus Before Announcement
Business inventories expected up 0.2 percent on the month.
Definition
Business inventories are the dollar amount of inventories held by manufacturers, wholesalers, and retailers. The level of inventories in relation to sales is an important indicator of the near-term direction of production activity.
Description
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 more moderate growth that won't generate inflationary pressures.
Rising inventories can be an indication of business optimism that sales will be growing in the coming months. By looking at the ratio of inventories to sales, investors can see whether production demands will expand or contract in the near future. For example, if inventory growth lags sales growth, then manufacturers will have to boost production lest commodity shortages occur. On the other hand, if unintended inventory accumulation occurs (that is, sales do not meet expectations), then production will probably have to slow while those inventories are worked down. In this manner, the business inventory data provide a valuable forward-looking tool for tracking the economy.
Rising inventories can be an indication of business optimism that sales will be growing in the coming months. By looking at the ratio of inventories to sales, investors can see whether production demands will expand or contract in the near future. For example, if inventory growth lags sales growth, then manufacturers will have to boost production lest commodity shortages occur. On the other hand, if unintended inventory accumulation occurs (that is, sales do not meet expectations), then production will probably have to slow while those inventories are worked down. In this manner, the business inventory data provide a valuable forward-looking tool for tracking the economy.
