May Wholesale Inventories, which makes up about 25% of Business Inventories, fell .8%, .2% less than expected and April was revised up .1%. It’s the 9th straight month in a row of declines. The biggest contributor to the drop was in the durable good sector led by auto’s and computers. With overall sales falling .2%, the inventory to sales ratio fell to 1.29 from 1.31 and it’s the lowest since Nov ’08. It still remains well off the record low of 1.10 back in June ’08 but is off the multi year high of 1.34 back in January. Business Inventories are out next Tuesday and all eyes are on this sector over the next 6 months in either confirming or denying the hoped for 2nd half GDP inventory restocking theme.
