WASHINGTON, (Reuters) - U.S. business inventories were unexpectedly unchanged in June as stocks at retailers dropped more than initially estimated, government data showed on Thursday.
The Commerce Department said the unchanged reading in business inventories followed a 0.3% increase in May.
Inventories are a key component of gross domestic product. Economists polled by Reuters had forecast inventories would rise 0.1% in June.
Retail inventories fell 0.3% in June instead of dipping 0.1% as estimated in an advance report published last month. Motor vehicle inventories declined 0.5% in June, rather than falling 0.3% as previously reported.
Retail inventories excluding autos, which go into the calculation of GDP, slipped 0.1% as reported last month.
The government in its advance GDP report last month said inventories subtracted 0.86 percentage point from economic growth in the second quarter. That resulted in the economy growing at an 2.1% annualized rate, a slowdown from the first quarter’s brisk 3.1% pace.
But economists expect the government will trim its second-quarter GDP growth estimate after data on June construction spending and wholesale inventories came in lower than what the government had assumed in the advance GDP report.
Wholesale inventories were unchanged in June. Stocks at manufacturers rose 0.2%. Inventory accumulation is slowing following a surge in consumer spending in the second quarter. Businesses are also carefully managing stock levels because of the darkening economic outlook, triggered by trade tensions between the United States and China.
Business sales edged up 0.1% in June after dipping 0.1% in the prior month. At June’s sales pace, it would take 1.39 months for businesses to clear shelves, down from 1.40 in May.
Reporting by Lucia Mutikani Editing by Paul Simao