Businesses Keep Inventories Tight As Sales Rise 0.2%
Business sales are up while inventories stay steady, according to a June Commerce Department report (link opens a PDF) released today .
Seasonally adjusted sales increased 0.2% to $1,286 billion for June. A 0.8% boost in retail sales packed the most punch, followed close behind by a 0.4% increase from merchant wholesalers. After registering a 1% increase in May, manufacturers saw sales slump 0.4% in June.
In the past year a 6.2% increase in retail sales provided the primary drive for a 4.9% boost in total business sales. Manufacturing is up 3.2% in the past 12 months, while merchant wholesalers have managed a 5.6% increase.
As sales headed higher, inventories remained steady at $1,655 billion. Analysts had expected a 0.2% increase. While manufacturers and retailers expanded supplies by 0.1%, merchant wholesalers eased back 0.2% on their own inventories. In the past year, overall inventories are up 3.5%.
To understand the rate at which goods are being made and sold, economists compute an inventories/sales ratio. Since sales increased only slightly, and inventories stayed steady from May to June, the inventories/sales ratio remained at 1.29. The June 2012 ratio was 1.30.
The article Businesses Keep Inventories Tight As Sales Rise 0.2% originally appeared on Fool.com.Fool contributor Justin Loiseau has no position in any stocks mentioned. You can follow him on Twitter, @TMFJLo, and on Motley Fool CAPS, @TMFJLo.The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.