Business inventories gain in July; may not be enough to move growth needle

A stack of plywood is moved with a forklift in the warehouse at Maze Lumber in Peru, Illinois.
Daniel Acker | Bloomberg | Getty Images

U.S. business inventories rose in July, but probably not enough to change views that stock accumulation could be a minor drag on economic growth in the third quarter.

The Commerce Department said on Friday inventories increased 0.4 percent after an unrevised 0.4 percent gain in June. Economists polled by Reuters had forecast inventories, which are a key component of gross domestic product changes, climbing 0.4 percent.

Retail inventories excluding autos, which go into the calculation of GDP, rose 0.4 percent after increasing 0.3 percent in June.

Inventories added 1.4 percentage points to GDP growth in the second quarter. Data on wholesale and manufacturing inventories released earlier this month suggested restocking would probably not contribute to growth in the third quarter.

In July, business sales rose 0.8 percent after increasing 0.6 percent in the prior month. At July's sales pace, it would take 1.29 months for businesses to clear shelves, unchanged from June.

--By Reuters