WASHINGTON, (Reuters) - U.S. wholesale inventories were revised lower to show them unchanged in June, indicating a slowdown in the pace of inventory accumulation that could further weigh on economic growth.
The unchanged reading in wholesale inventories reported by the Commerce Department on Thursday was a downward revision to a 0.2% gain estimated last month. Stocks at wholesalers rose 0.4% in May. They advanced 7.6% on a year-on-year basis in June.
The component of wholesale inventories that goes into the calculation of gross domestic product edged up 0.1% in June.
While inventories increased further in the second quarter, the pace of accumulation was slower than early in the year. Some of the slowdown in the pace of inventory accumulation reflects a surge in consumer spending in the second quarter.
Businesses are also carefully managing stock levels as the economy’s outlook continues to darken amid an escalation in the trade war between the United States and China, which has roiled financial markets.
Inventories subtracted from GDP growth in the second quarter. The economy grew at a 2.1% annualized pace in the April-June period, slowing from the first quarter’s 3.1% rate.
In June, wholesale auto inventories slipped 0.2% after increasing 1.6% in the prior month. There were increases in professional equipment and machinery inventories. Hardware inventories fell by the most since October 2016.
Sales at wholesalers dropped 0.3% in June after falling 0.6% in May. Motor vehicle sales declined 0.2% in June after increasing 2.6% in May. At June’s sales pace it would take wholesalers 1.36 months to clear shelves, unchanged from May.
Reporting by Lucia Mutikani Editing by Paul Simao