Wholesale Inventories Down, Again

Businesses reduced inventories at the wholesale level for a record eleventh consecutive month in July, although sales rose by the largest amount in more than a year, sparking hope for better days ahead,
Manufacturing.Net reports.

Economists expect that some modest restocking, triggered by the higher sales, helped boost the economy out of recession in the current quarter. Some analysts said the economy could rebound to growth approaching 4%, after it fell at a 1% rate in the April-June period.

The Commerce Department reported that wholesale inventories declined 1.4% in July, more than the 1% drop economists expected. That decline followed a 2.1% fall in June, worse than the 1.7% drop originally reported.

Sales at the wholesale level rose 0.5% in July, the fourth consecutive increase and the biggest gain since a 2% jump in June 2008. The overall economy, as measured by the gross domestic product, will grow at a 3.8% annual rate in the current July-September period, analysts forecast. The economy posted declines of 5.4% and 6.4% in the fourth and first quarters respectively, the worst performance in a half-century.