Well Greece rumours are flying all around..
Fellow on BNN today talked about high recent rail traffic.. yet I also saw this on inventory stocking..
US Wholesalers Build Up Inventories As Sales Stall WASHINGTON -- U.S. wholesalers stockpiled inventories in July as sales were flat, an indication that companies are growing increasingly cautious about the economic outlook. Wholesale inventories increased 0.8% to a seasonally adjusted $462.41 billion, after rising 0.6% in June, the Commerce Department said Friday.
Economists surveyed by Dow Jones Newswires had anticipated a 0.8% gain in July inventories.
However, sales of U.S. wholesalers were little changed at a seasonally adjusted $396.01 billion, following a 0.6% rise in June.
A buildup in inventories early in the year helped to prop up the beleaguered economy, accounting for most of the 0.4% expansion in gross domestic product in the first quarter. However, recent revisions showed that inventories actually subtracted 0.2 percentage point from second-quarter GDP, instead of adding that amount as initially thought. That was a big factor in the downward revision in second-quarter growth last month to 1.0% from 1.3%.
Some economists view the leaner inventories as an indication of higher growth later in the year. But if companies grow too concerned about demand and trim stockpiles even further, inventories could remain a drag on the economy. Wholesalers hold about 30% of all business inventories in the U.S., with manufacturers and retailers making up the rest.
Barclays Capital senior economist Peter Newland said the inventory gains are a good sign for third-quarter growth, contributing to positive July data on consumption and exports. So far this quarter, GDP is tracking around 2.5% growth, above the firm's forecast of 2%.
"Key for the near-term outlook will be whether this momentum can be maintained or if downside risks from sharp declines in consumer, business and market sentiment are realized," he said.
In a positive sign, the Institute for Supply Management's index for manufacturing inventories climbed to 52.3 last month from 49.3 in July, despite a slight decline in the overall index.
Friday's report showed a slight gain in the amount of wholesale goods on hand relative to sales in July. The inventory-to-sales ratio, which measures how many months it would take for a firm to deplete its current inventory, edged up to 1.17 from 1.16 in June.
The higher ration could signal a "modest inventory overhang," said Insight Economics chief economist Steven Wood. Moreover, the poor sales figure provides "more evidence that the economy has been in a soft patch," he said.
On a year-over-year basis, inventories were 15.1% higher, while sales were up 14.4% from July 2010.
Wholesalers' inventories of durable goods -- meant to last three or more years -- increased 1.0%. Durable goods sales rose by 1.4% in July.
Auto inventories climbed by 0.6%, as sales jumped 5.3%. Vehicles sales and shipments have recovered since the earthquake and tsunami in Japan disrupted the supply of new cars to U.S. dealers.
Non-durable goods inventories increased 0.5%, while non-durable goods sales slid 1.1%. Petroleum accounted for a big part of that, with inventories climbing 2.1% amid a 1.5% drop in sales. The Commerce Department data are available online at:
The Commerce Department data are available online at: www2.census.gov wholesale/pdf/mwts/currentwhl.pdf.
-By Tom Barkley and Andrew Ackerman, Dow Jones Newswires; 202-862-9275; tom.barkley@dowjones.com
(END) Dow Jones Newswires 09-09-111035ET Copyright (c) 2011 Dow Jones & Company, Inc. nasdaq.com
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