UPDATE 1-U.S. wholesale stocks barely rise, may impact Q3 growth

Wed Sep 11, 2013 12:41pm EDT

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* Wholesale inventories rise 0.1 percent in July
    * Computer equipment stocks drop 3.5 percent
    * Sales at wholesalers nudge up 0.1 percent
    * Report implies little or no lift to Q3 GDP from restocking

    By Lucia Mutikani
    WASHINGTON, Sept 11 (Reuters) - U.S. wholesale inventories
rebounded less than expected in July, suggesting restocking will
probably not contribute much to economic growth in the third
quarter.
    The Commerce Department report on Wednesday was the latest
signal of slower growth early in the July-September period and
one Wall Street firm trimmed its gross domestic product
estimate, while other economists anticipated no contribution
from inventories.
    Stocks at wholesalers edged up 0.1 percent in July after
falling 0.2 percent in June. Economists polled by Reuters had
expected wholesale inventories to rise 0.3 percent.
    Inventories are a key component of GDP changes. Excluding
autos, wholesale stocks nudged up 0.1 percent in July. 
    This component goes into the calculation of GDP. As a result
of the tepid rise, Barclays pared its third-quarter growth
estimate by a tenth of a percentage point to 1.6 percent. 
    Michael Englund, chief economist at Action Economics saw no
boost to growth from restocking this quarter.
    "For the third quarter, we assume 1.8 percent GDP growth
with a flat inventory figure," said Englund. 
    
    
    Data so far such as industrial production, durable goods
orders, trade and consumer spending have suggested a loss of
momentum in growth early in the third quarter after a fairly
brisk 2.5 percent annual pace in the second quarter. 
    "It's consistent with a drawdown in inventories. Overall
what it means is that businesses in general are not adding to
inventories," said Yelena Shulyatyeva, an economist at BNP
Paribas in New York. 
    "They would like to be on the cautious side and see what
happens with the fiscal issues and other uncertainties building
this fall." 
    Retail inventory data for July, which is scheduled for
release on Friday, will shed more light on the state of
restocking early in the quarter. Inventories added 0.59
percentage point to second-quarter GDP growth. 
    Economists expect the pace of inventory accumulation to slow
a bit in the July-September quarter after consumer spending
moderated in the previous quarter.
    Wholesale inventories in July were held back by a 1.2
percent drop in professional equipment stocks. That reflected a
3.5 percent tumble in computer equipment inventories.
    The decline in professional equipment inventories was the
largest since August last year and partially offset gains in
automobile, petroleum, furniture, machinery, electrical and
apparel stocks.
    Sales at wholesalers nudged up 0.1 percent after rising 0.4
percent in June. Economists had expected sales to rise 0.4
percent in July.
    Automobile sales tumbled 3.1 percent, the most since
October. There were also declines in the sales of drugs,
electrical goods, machinery and hardware. Furniture, apparel and
petroleum sales increased as did sales of paper and metals.
    At July's sales pace it would take 1.17 months to clear
shelves. The inventories/sales ratio was unchanged from June.
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