US August wholesale inventories rise 1.1 pct, ratio to sales still at record low

Inventories and sales at US wholesalers each rose at the same faster-than-expected pace in August, the Commerce Department said Tuesday. Inventories at US wholesalers rose 1.1 pct in August, compared with a 0.8 pct expected rise. Sales also increased 1.1 pct. The inventory-to-sales ratio remained at a record low of 1.15 for the fourth consecutive month. July's inventory gain was revised to 0.9 pct from 0.8 pct earlier. July sales rose a revised 0.5 pct from an earlier estimate of a 0.4 pct increase. Durable goods sales rose 1.4 pct, led by a 1.5 pct rise in auto sales. Inventories of durable goods rose 0.9 pct in August, despite a 0.9 pct decline in auto inventories. The inventory-to-sales ratio for durables fell to 1.49 in August from 1.50 in July. That's the lowest level since January. Wholesalers are middlemen operating between retailers and producers, who serve as absorbers for supply and demand shocks. Sales of nondurable goods rose 0.9 pct, despite a 1.6 pct decline in petroleum sales. Apparel sales rose 0.7 pct in August. Grocery sales rose 3.7 pct in the month, the fastest pace in nearly a decade. Inventories of nondurable goods rose 1.5 pct in August. Drug inventories rose 5.7 pct, the fastest gain since October 1996. The inventory-to-sales ratio for nondurables rose to 0.83 in June from 0.82 in the prior month. Markets rarely react to the wholesale trade report, as the data is mostly used by economists to better gauge economic growth.