WASHINGTON (Reuters) – U.S. business inventories declined again in June as sales continued to accelerate amid pent-up demand as establishments reopened after being shuttered to slow the spread of the novel coronavirus.
Business inventories fell 1.1% in June after decreasing 2.3% in May, the U.S. Commerce Department said on Friday. Inventories, a key component of gross domestic product, have now declined for six straight months.
Economists polled by Reuters had forecast business stocks falling 1.2% in June.
Retail inventories decreased 2.6% in June as estimated in an advance report published last month. That followed a 6.2% fall in April. Motor vehicle inventories tumbled 6.7% rather than 6.5% as previously reported.
Retail inventories excluding autos, which go into the calculation of GDP, dropped 0.8% as reported last month.
The prolonged inventory drawdown contributed to GDP declining at a record 32.9% annualized rate in the second quarter. Inventories subtracted almost 4 percentage points from GDP, the most since the fourth quarter of 1982.
Inventories have declined for five straight quarters. The economy fell into recession is February.
Wholesale inventories fell 1.4% in June. Stocks at manufacturers rose 0.6%.
Business sales increased 8.4% in June after rebounding 8.5% in the prior month. At June’s sales pace, it would take 1.37 months for businesses to clear shelves, down from 1.50 months in May.
(Reporting by Lucia Mutikani; editing by Jonathan Oatis)