U.S. Inventories Increase in July

U.S. companies increased inventories during July more than had been forecasted, trailing a sales gain that signals an uptick in factory orders.

Inventory stockpiles increased by 0.4%, the biggest increase in the past six months, after it climbed 0.1% (revised) in June, said a report released on Friday by the Commerce Department.

The average estimate by economists projected an increase of 0.2% for July. In July, sales were up 0.6%.

Merchants had sufficient enough goods to last approximately 1.28 months at the current pace of sales, the least amount of time since May of 2012. An improved demand for goods such as cars and home furnishing might encourage businesses to replenish their stockpiles.

Estimates from economists ranged from 0.5% gain down to no change. In June, it was originally reported no chance in inventory but was revised to 0.1%.

Stockpiles for retailers, the only section the inventory report that had not been released previously, increased by 0.8% during July, the largest increased in that sector since January, with an advance in sales of 0.4%.

Another report released on Friday from the Commerce Department showed an increase in retail purchases lower that forecast for August.

The gain of 0.2% was the lowest in four months and the medium forecast by economists was for a gain of 0.5%.

Eight of the 13 biggest categories had increases for sales in August and were led by electronic stores, car dealerships and furniture outlets. Building material purchases, along with sporting goods and clothing all fell.

The value of auto parts and unsold cars were up by 0.8% during July as the demand eased, showed the report released on Friday.

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