Wholesale Sales Up 1.3%

Washington, DC, July 10, 2007—Wholesale sales increased 1.3 percent in May, after a 1.5 percent increase in April, according a Commerce Department. Inventories rose a greater-than-forecast 0.5 percent.

The ratio of inventories to sales dropped to a record low, which may encourage wholesalers to replenish deleted stocks to ensure they can meet demand. Inventory building and production increases will help the economy accelerate after posting the slowest rate of growth in four years last quarter.

The amount of goods on hand represented a 1.11 months' supply at the current sales pace, the lowest ever and down from 1.12 months in April.

Economists had forecast wholesale inventories would increase 0.4 percent after a 0.3 percent April gain. The value of wholesale inventories rose to $396.7 billion in May, from $394.8 billion a month before, today's report showed.