US business inventories decline further in June

WASHINGTON: U.S. business inventories declined again in June as sales continued to accelerate amid pent-up demand as establishments reopened after being shuttered to slow the spread of the novel coronavirus.

Business inventories fell 1.1per cent in June after decreasing 2.3per cent in May, the U.S. Commerce Department said on Friday. Inventories, a key component of gross domestic product, have now declined for six straight months.Economists polled by Reuters had forecast business stocks falling 1.2per cent in June.

Retail inventories decreased 2.6per cent in June as estimated in an advance report published last month. That followed a 6.2per cent fall in April. Motor vehicle inventories tumbled 6.7per cent rather than 6.5per cent as previously reported. Retail inventories excluding autos, which go into the calculation of GDP, dropped 0.8per cent as reported last month.

The prolonged inventory drawdown contributed to GDP declining at a record 32.9per cent annualized rate in the second quarter. Inventories subtracted almost 4 percentage points from GDP, the most since the fourth quarter of 1982.Inventories have declined for five straight quarters. The economy fell into recession is February.Business sales increased 8.4per cent in June after rebounding 8.5per cent in the prior month. At June's sales pace, it would take 1.

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