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U.S. business inventories rise above expectations in June

U.S. business inventories in June rose above expectations. This signifies a slight upward revision to already-released GDP estimates for the second quarter, noted Wells Fargo in a research report. A brisk rate of sales implies that the stockpiling is not unintended.

Inventories rose 0.5 percent in June, as compared with consensus expectations of 0.4 percent rise. The June rise is the largest monthly increase so far in 2017. The initial estimate for the second quarter GDP assumed a slight decline in private inventories. This report implies a modes build, stated Wells Fargo.

Sales also increased in the month, rising 0.3 percent in June; however, that was not sufficient to maintain pace with the more rapid rate of inventory growth. The inventory-to sales ratio rose to 1.38. In spite of the rise in the inventory-to-sales ratio, there is not sign of worrying back-up in stockpiles. In contrast, the year-on-year percent change for sales is ahead of that measure for inventories, added Wells Fargo.

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