US business inventories grew by more than expected in July and the previous month was revised higher, government data showed today, delivering the strongest two-month performance in nearly five years.
The US Commerce Department said July business inventories climbed 0.9 per cent to $1.247 trillion while sales rose 0.6 per cent.
June inventories were also revised up, to a 1.1 per cent increase from a previously reported 0.9 per cent gain, to give a two-month advance of 2.0 per cent.
A Commerce Department official said this was the strongest since a matching increase in November and December 1999.
June sales were revised to a 0.2 per cent gain from an initially reported 0.1 per cent advance.
Economists see rising inventories either as a sign of confidence in future demand or as a result of an unexpected decline in sales which has led to involuntary stock building.
Deciding which of these interpretations is the case is helped by a sense of whether stocks are lean by historical standards from looking at the inventories-to-sales ratio.