Wholesale inventories increased 0.2% m/m in July, as expected, on top of a downwardly revised 0.1% decline (from 0.0%) for June.
Wholesale sales increased 0.3% in July after declining an unrevised 0.3% in June.
On a year-over-year basis, total sales were unchanged while total inventories were up 7.1%.
Durable inventories decreased 0.2% in July, driven by a decline in inventories for metals (-1.9%), electrical (-1.5%), hardware (-0.5%), and machinery (-0.2%).
Nondurable inventories increased 0.8% in July, driven by increases in all categories with the exception of apparel (-0.3%) and chemicals (-1.6%).
The inventories-to-sales ratio held steady month-over-month at 1.36, but was up from 1.27 a year ago.The key takeaway from the report is that it could prove difficult for wholesalers to gain pricing power given that inventory growth remains well ahead of sales growth on a yr/yr basis.