U.S. ECONOMICS: Business Inventory Revisions May Weigh on Q2 GDP
U.S. business inventories rose 0.4% in June after a 0.5% gain in May. Retailer inventories increased 0.5%. Business sales were up 0.3% after a like-sized gain in May (revised down from 0.4% previously). The inventory-sales ratio held steady at 1.29 for a fourth straight month. The expected 0.4% rise followed a downwardly revised 0.5% (was 0.6%) May gain to leave a weaker inventory path than the Bureau of Economic Analysis first assumed in constructing its 4.0% Q2 GDP growth estimate. Inventories could reduce overall GDP when the agency releases its first revision to Q2 on August 28.
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