Inventories rise in May (but - sales up also); +Greenman watch...
WASHINGTON — Businesses boosted their stockpiles of goods on shelves
and backlots at a faster-than-expected pace in May with retailers leading the
way. The Commerce Department said Monday that business inventories
nationwide grew by 0.8% in May to a seasonally adjusted $1.18 trillion, the
fastest pace since November, when inventories rose by 0.9%. May's increase
was twice as fast as the 0.4% gain many analysts were expecting. At the same
time, sales rose 1% to $895 billion, the biggest gain since March. May's sales
increase left the inventory-to-sales ratio at 1.32, meaning it would take 1.32
months to exhaust inventories at the May sales pace. The ratio also stood at
1.32 in April.
Some details:
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cbs.marketwatch.com
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Also, ...Greenspan remarks, CPI loom on radar
By Dina Temple-Raston, USA TODAY
This week is shaping up to be a crucial week for economists seeking clues
about the future course of interest rates.
Federal Reserve Chairman Alan Greenspan's semiannual testimony Thursday
before Congress will go a long way toward indicating whether more interest
rate increases are in the cards.
In addition to Greenspan's testimony, this week's other key event is the
release Tuesday of the June consumer price index the most closely watched
gauge of inflation.
The overall CPI figure is expected to show inflation picking up, mainly
because of rising energy prices. Analysts say rocketing gas prices last month
will be behind a "headline" increase of as much as 0.5%.
But the more important figure, the one the Fed and investors watch, is the
so-called core rate of inflation, which strips out volatile food and energy
prices. Economists expect that to be 0.2% to 0.4%, according to Stone &
McCarthy Research Associates.
So far this month, the data are not making the Fed's job any easier. Some
economists see signs of consumers pulling back and the labor market — a top
Fed concern — finally loosening up. Others say the Fed's work isn't done and
what the economy is experiencing is a temporary lull. That could mean the
Fed will raise the target for short-term interest rates again when it meets Aug.
22.
"Those hoping the Fed is finished tightening may have been premature," says
Diane Swonk, chief economist at Bank One in Chicago.
"Greenspan is going to have to deal with the robustness of the economy — it
may not be slowing enough, and I expect he'll indicate that," she says.
What the Fed is after is an economy slowing just enough to cool inflation, but
not so much that it slips into recession. |
