UPDATE 1-US July wholesale inventories jump 1.3 pct

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WASHINGTON, Sept 10 (BestGrowthStock) – U.S. wholesale inventories
surged by the largest amount in two years in July, a government
report said on Friday, in a sign firms were anticipating enough
demand to boost stock this summer.

Inventories jumped 1.3 percent, the steepest gain since July
2008, and more than three times the 0.4 percent increase
analysts had anticipated, a Commerce Department report showed.

A restocking of inventories has helped drive the economy’s
recovery, but analysts say slowing demand has likely left
businesses with ample stocks and they expect the boost from
inventories to fade in the second half of the year.

A quickened pace of inventory accumulation accounted for 0.6
percentage points of the economy’s 1.6 percent annual growth
rate during the second quarter.

Economic data suggest the recovery may have lost steam over
the summer. Friday’s report showed wholesale sales rose by a
larger-than-expected 0.6 percent in July, suggesting
inventories may not have been gathering too much dust on
shelves.

But the sales rise followed declines in June and May, and
analysts said sales would need to stay strong to support
continued inventory building.

“In general there has been an increase in inventories at a
time when the economy is slowing down,” said Brian Bethune, an
economist with IHS Global Insight in Lexington, Massachusetts.
“Something’s gotta give here. Either the economy picks up or
production has to be cut.”

Markets paid little attention to the report.

The inventory-to-sales ratio, which measures how long it
would take to clear shelves at the current sales pace, edged up
to 1.16 months’ worth. It was the highest since February, but
was down from 1.27 months’ worth a year ago.
(Reporting by Mark Felsenthal, Editing by Andrea Ricci)

UPDATE 1-US July wholesale inventories jump 1.3 pct