(RTTNews) - Business inventories increased in line with economist estimates in the month of July, the Commerce Department revealed in a report released on Thursday.
The report said business inventories rose by 0.5 percent in July after climbing by an upwardly revised 0.9 percent in June.
Economists had expected business inventories to rise by 0.5 percent compared to the 0.8 percent increase originally reported for the previous month.
Wholesale and manufacturing inventories climbed by 0.6 percent and 0.5 percent, respectively, while retail inventories rose by 0.4 percent.
The Commerce Department said business sales also increased by 0.5 percent in July after jumping by 1.6 percent in June.
Wholesale and manufacturing sales surged by 2.0 percent and 1.6 percent, respectively, more than offsetting a 2.2 percent slump in retail sales.
With inventories and sales both rising, the total business inventories/sales ratio came in at 1.25 in July, unchanged from the previous month.
"Inventories will stay scant relative to sales for the rest of 2021," said Oren Klachkin, Lead U.S. Economist at Oxford Economics. "Strong demand and supply side pressures in the form of high input prices, logistical bottlenecks, hiring constraints, and raw material shortages will drag on inventory restocking efforts."
He added, "We expect to see a more constructive environment for inventory growth next year as supply chain pressures ease and sales return to more normal and predictable patterns."
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