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U.S. wholesale inventories drop for ninth month

WASHINGTON
Thu Jul 9, 2009 1:53pm EDT

WASHINGTON (Reuters) - U.S. wholesale inventories shrank in May for the ninth month in a row to their lowest level since August 2007, government data showed on Thursday.

The 0.8 percent drop to $402.24 billion was smaller than the 1.0 percent decline analysts polled by Reuters had expected. The Commerce Department also revised April's fall to 1.3 percent from the 1.4 percent decline reported last month.

Sales at merchant wholesalers rose 0.2 percent, beating analysts' expectations that they would be unchanged and pushing the inventory-to-sales ratio, a measure of how long it would take to deplete current stocks, down to 1.29 months' worth from April's 1.31 months. That was the lowest since a matching ratio in November.

Inventories of durable goods, items meant to last at least three years that make up more than 60 percent of wholesale inventories, fell for the eighth month in a row in May, by 1.5 percent. They were also down 8.2 percent from a year earlier.

Nondurable items, which include groceries, petroleum and drugs, rose 0.3 percent after being unchanged in April.

Petroleum inventories increased 4.5 percent, while sales rose 4.6 percent in May. The Commerce Department also said sales of motor vehicles and automotive parts were up 4.4 percent in their largest gain since December 2006.

(Reporting by Lisa Lambert; Editing by Padraic Cassidy)



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