Following yesterday’s lower than expected Trade Deficit which will lead to upward revisions to economists Q3 GDP forecasts, Inventories may also help if today’s figure is any indication. July Wholesale Inventories, about 25% of total Business Inventories, rose a higher than expected 1.3% vs the forecast of .4% and follows a .3% gain in June. Because sales rose just .6%, the inventory to sales ratio rose to 1.16 from 1.15 but still remains near the record low of 1.13 in April. It’s the 9th gain in the past 10 and follows 13 straight months of declines. It’s too early to say that the inventory gain is unwanted because of slack end demand as maybe businesses are hopeful that demand will soon pick up again but today’s figure makes next week’s Business Inventory number worth watching both relative to sales and for the potential short term contribution to Q3 GDP.
