Total business inventories increased 0.6% (4.3% y/y) during July following a 0.1% June rise. It was the strongest increase since February. Total business sales increased 0.2% (8.1% y/y), following a 0.3% gain. The inventory-to-sales ratio rose to 1.34 from 1.33. It peaked early in 2016 at 1.43.

Retail inventories increased 0.5% (2.3% y/y) in July, following a 0.1% dip. Auto inventories jumped 1.2% (2.8% y/y) after a 0.1% easing. Non-auto retail inventories increased 0.1% (2.0% y/y) following a 0.1% slip. General merchandise inventories rose 0.3% (0.2% y/y) after a 0.4% fall. In the department store sector, inventories declined 0.6% (-3.0% y/y) following a 0.7% fall. Building materials inventories rose 0.7% (7.4% y/y) after a 1.4% jump, but clothing store inventories fell 0.2% (-0.8% y/y), down for the fifth straight month. Inventories of furniture, electronics and appliances recovered 1.2% (-0.9% y/y) after declining for five of six months this year. As reported earlier, wholesale inventories rose 0.6% (5.0% y/y) following a 0.1% rise. Factory sector inventories surged 0.8% (5.6% y/y) following two months of 0.2% gain.

Retail sales rose 0.5% (6.2% y/y) in July after a 0.1% improvement. Non-auto sales strengthened 0.7% (7.2% y/y) after a 0.1% gain. Wholesale sector sales eased (+9.8% y/y) for a second straight month. Shipments from the factory sector held steady (8.1% y/y) following two months of strong growth.

As the overall business inventory-to-sales (I/S) ratio rose to 1.34 in July, the retail sector ratio held steady at 1.43, down sharply from the levels averaged during the prior two years. The non-auto I/S ratio also was steady at 1.19, its lowest level since early-2012. The ratio peaked at 1.29 early in 2016. The wholesale sector I/S ratio rose slightly to 1.26. The manufacturing sector I/S ratio inched higher to 1.35, but remained near the three-year low.

The manufacturing and trade data are in Haver's USECON database.