Business Inventories Rise: Double Versus Expectations
We had already seen some very weak data from August for industrial production and for capacity utilization this morning. Then came a report showing a huge, more current pop in consumer sentiment from the Reuters/University of Michigan report. Now comes a report showing a rise in business inventories.
As you might have expected with prior wholesale inventories, the July reading for business inventories from the Census Bureau showed that business inventories rose by 0.8% to a seasonally adjusted figure of $1.592 trillion in July, versus a 0.1% gain in June. Bloomberg was calling for only a 0.5% rise and Dow Jones was calling for a gain of +0.4% for this report.
Retail was given the blame here, as their 1.1% gain was blamed on more cars on car lots. Vehicles and parts were up 2.7% in July, but that is said to be more than 20% higher from a year earlier.
The hope today is that the 0.9% gain in retail sales will have eaten up much of the inventory. That being said, with yesterday's announcement of a new round of quantitative easing from Ben Bernanke and friends at the Federal Reserve, this number was going to likely be ignored. It is also a July reading and we have seen more current data.
JON C. OGG
Filed under: 24/7 Wall St. Wire, Economy