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Wholesalers’ inventory growth slows

Wholesalers may be trying to limit the amount of unsold merchandise on hand as the economic expansion slowed. Wholesalers may be trying to limit the amount of unsold merchandise on hand as the economic expansion slowed. (Konrad Fiedler/Bloomberg News)
Bloomberg News / August 11, 2011

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WASHINGTON - Inventories at wholesalers climbed in June at the slowest pace in seven months as distributors kept stockpiles in line with sales.

The 0.6 percent increase in inventories followed a revised 1.7 percent rise in May, Commerce Department figures showed yesterday. Economists projected a 1 percent gain, according to the median forecast in a Bloomberg News survey. Sales also rose 0.6 percent in June after dropping the previous month.

Wholesalers may be trying to limit the amount of unsold merchandise on hand after the economic expansion slowed in the first half of this year.

“Inventories are likely desired at a much lower level so they’re probably excessive given new expected future economic growth,’’ said Robert Brusca, president of Fact & Opinion Economics in New York.

Wholesalers’ stockpiles of durable goods, or those meant to last several years, increased 1.3 percent in June, led by a surge in imported automobiles and parts, yesterday’s report showed. Metals and machinery inventories also picked up in June.

The value of unsold nondurable goods inventories decreased 0.4 percent as the value of farm products and petroleum stockpiles fell.

Consumers may spend less as the economy cools, reducing the need for companies to step up additions to inventories.