Data from the U.S. Commerce Department indicates that U.S. business inventories remained unchanged for the second consecutive month in June, highlighting the fragility of the consumer environment amidst high interest rates and reduced household spending. The latest report, which aligns with economists' expectations, reveals that the reading for manufacturers' and trade inventories remained steady in June, while May's reading was revised from an initial estimate of a 0.2% increase.
According to the data, inventories at retailers increased by 0.7% on a monthly basis in June, but fell by 0.5% at wholesalers and showed no change at manufacturers.
Meanwhile, on an annual basis, total business inventories saw a 2.0% increase, as reported by the Commerce Department.
The data also highlights the ratio of inventories to sales, which serves as an indicator of the number of months it would take for businesses to clear their inventories at the current sales rate. In June, this ratio stood at 1.40, compared to 1.33 in June 2022.
The steady holding of U.S. business inventories raises concerns about the economic climate and underscores the impact of high interest rates on consumer spending.
