Business Inventories Start Strong For 3rd Quarter

Business inventories start the third-quarter very strong, rising 0.6 percent in July following only a 0.1 percent build in June. Inventories at manufacturers rose 0.8 percent with strong builds also posted by wholesalers and retailers. Inventories are beginning to catch up with underlying sales which rose only 0.2 percent in July though the year-on-year spread is still out of balance, at 4.3 percent for inventories vs 8.1 percent for sales. The need to build inventories looks to be a major positive for GDP and a major positive for production and employment.