June Business Inventories Rise 0.4%; Sales Up 1.2%

Led by increased stockpiles of cars and trucks, U.S. business inventories rose in July for a third straight month, while sales rose by the largest amount since April, the Commerce Department said Monday.

The 0.4% increase in inventories was twice economists' expectations and followed a 0.3% gain in June. Sales at factories, wholesalers and retailers surged 1.2% after rising 0.3% the month before.

Economists told Bloomberg automakers continue to replenish stocks because they want to make sure they have enough vehicles to meet consumer demand.

ncreased inventories and sales are likely to add to third-quarter growth and bolster manufacturing in coming months, Bloomberg said. The manufacturing sector is one of trucking’s largest and most impor-tant.

Stockpiles at manufacturers fell 0.1% in July, while sales rose 1.6%.

Commerce said the inventory-to-sales ratio, which measures the time goods sit at businesses, fell to 1.35 months in July from 1.36 months in June. The ratio matched April's record low.

The last time inventories rose in three or more months was June 1998 through January 2001.

Except for the auto industry, most retailers are remaining cautious about adding too much inventory until they are convinced of the economic recovery, Bloomberg said. Others are keeping inventories down to cut costs.