Washington, DC, August 11--Businesses inventories held steady in June and rising sales pushed the stocks-to-sales ratio down to a record low, the government said on Thursday.
Sales rose 0.7 percent in June after an unchanged reading in May, the Commerce Department said.
The strong sales performance pushed the inventories-to-sales ratio - a measure of the number of months it would take to deplete stocks at the current sales pace - to a record low 1.29.
Financial markets had looked for a 0.1 percent rise in business inventories, the same as in May. The unchanged inventory reading was the weakest since a 0.1 percent decline in stocks in September 2004, a Commerce aide said.
The failure of businesses to increase already lean inventories was likely to bolster the view of economists that producers would need to boost output over the remainder of the year to meet consumer and business demand.
The report showed a 0.4 percent drop in inventories at retailers, with auto dealers cutting their stocks by 2.4 percent as sales incentives brought a rush of business.
Manufacturers held their inventories steady, while wholesale stocks increased 0.7 percent.
