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Wholesale Inventories Decline for Record 11th Straight Month
Wholesale inventories were reduced at a faster pace than expected in July, but a bump in sales provides further hope that businesses will begin restocking, helping the economy to stabilize and perhaps creating new jobs.rnrnInventories were slashed 1.4% in July, marking a record 11 straight months of declines. Moreover, the cutback in June was revised to -2.1% from an initially reported -1.7%. Both numbers represent a drag on Q3 GDP, though the contraction is smaller than what was seen in the second quarter.
Survey Says Consumers Gaining Confidence
Contrary to expectations that consumer sentiment would be stuck in neutral, confidence shifted gears and drove nearly 5 points to 70.2 in September.rnrn“Although the 4.5-point jump was not enough to erase the prior two monthly declines (totaling 5.1 points), that's pretty darn impressive, particularly with the high rate of joblessness, said economist Jennifer Lee from BMO Capital Markets. She attributed the gain to a bottoming out in home prices as well as recent highs in the stock market.
Import Prices Pulled Higher by Petroleum
As the US dollar index hits fresh lows, the latest index tracking import prices moved up at a pace of 2% in August, quadruple the forecasts. Despite increases in five of the past six months, prices are still down 15% since last year, compared with an annual drop of 19.3% reported in July.rnrn“Although inflation is not a front-burner issue, the broad-based nature of the gains in prices in August underscore the influence that a weakening dollar can have on import prices,†noted analysts from RDQ Economics.
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