MNI DATA ANALYSIS: US July Business Inventories Up 0.6%>

--Retail Inventories Rise 0.5%, Rev Up From +0.4% Advance Estimate 

--Total Business Inventories Excluding Retail Auto Still Up 0.6%

--Unpublished Retail Components Down 0.4%, MNI Calculation Shows

By Kevin Kastner

     WASHINGTON (MNI) - The value of business inventories in July was up 

0.6%, as expected by analysts and the MNI calculated prediction, data 

released by the Commerce Department Friday morning showed. 

     Retail inventories rose 0.5%, revised up from the 0.4% gain in the 

advance estimate. Data from the wholesale inventory report showed a 0.6% 

rise in the month, which was revised down from the 0.7% gain in the 

advance report, while factory inventories were up 0.8%. 

     According to an MNI calculation, if a 1.2% increase in motor 

vehicle inventories had been excluded, total business inventories would 

have been still been up 0.6% in July. The increase in motor vehicles 

inventories was revised up from a 1.0% gain in the advance estimate. 

     After excluding the increase in motor vehicle inventories, the 

remaining retail categories were up 0.1%, unrevised from the advance 

estimate. There were increases for furniture, building materials, 

general merchandise stores and  food and beverage stores. These were 

offset by a decline at clothing stores. 

     The relatively large unpublished retail category fell 0.4% 

following a 0.1% decrease in June, according to an MNI calculation. 

--BUSINESS SALES UP MODESTLY

     July business sales posted a 0.2% increase in the month, above the 

0.1% rise forecast by MNI after the wholesale data were released, but 

before the upward revision to July retail trade sales released earlier 

Friday morning. 

     Retail sales excluding food services rose 0.5% in July, revised up 

from the 0.4% gain reported last month. There were previously announced 

flat readings for factory shipments, which are equal to sales in this 

report, and wholesale sales. 

     The inventory-to-sales ratio rose to 1.34 in July from 1.33 due to 

the smaller gain in sales than in inventories this month. The ratio 

remains well below the 1.39 level seen in July 2017, as sales growth has 

sharply outpaced inventory growth over the last year. 

     The large July gain in business inventories is a positive factor 

for the start of the third quarter, but it remains to be seen whether 

inventory growth slows over the next two months. 

     ** MNI Washington Bureau: 202-371-2121 ** 

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