Total business inventories were unchanged in June following an unrevised 0.1% gain in May. The weakness in accumulation lowered the three month change in inventories to 1.4% (AR) versus a 12.1% peak rate of accumulation through last August. The ratio of inventories-to-sales dropped to a new record low of 1.29 as business sales rose 0.7% (7.8% y/y).

Retail inventories fell 0.4% due to strong auto sales in June and the three month change went slightly negative versus the peak of 12.4% last April. Excluding autos, however, retail inventories jumped 0.6% after an upwardly revised 0.7% May gain. Furniture inventories were again strong, up 1.3% (9.0% y/y) and inventories of apparel rose 0.9% (5.3% y/y).

Factory sector inventories fell slightly for the third consecutive month pulling three month negative for the first time since 2003.

Wholesale inventories jumped 0.7% and three month growth rose to 6.9%. During the last ten years there has been a 64% correlation between the y/y change in wholesale inventories and the change in imports of merchandise.