The U.S. wholesale report revealed a solid 0.7% June sales bounce
The U.S. wholesale report revealed a solid 0.7% June sales bounce after a May boost that left a 0.1% (was 0.5%) drop, alongside a 0.7% June wholesale inventory rise that beat the 0.6% climb in the advance indicators report, after an upwardly-revised 0.6% (was 0.4%) May rise. Inventory growth matched the solid June sales figure to leave what is still a truncated downtrend in the inventory-to-sales (I/S) ratio as producers struggle to bring the ratio lower. The I/S ratio rose to 1.29 in May and June from 1.28 over the prior four months. Analysts now expect a Q2 GDP growth trimming to 2.4% (was 2.3%) from 2.6%, with a $7 B boost in wholesale inventories, but downward revisions of $3 B for factory inventories and $9 B for construction. Analysts still expect Q3 GDP growth of 3.3%, with a $26 B inventory addition after a $2.5 (was -$1.5) B Q2 addition that left a $3.7 (was -$0.3) B accumulation rate. Inventories have yet to recover from the big 2015-2016 petro-hit. Analysts expect a 0.5% (was 0.4%) June business inventory rise after a 0.3% May increase.