Business sales and inventories are both up, according to a July Commerce Department report (link opens as PDF) released today.

Seasonally adjusted sales increased 0.6% to $1,294 billion for July. Manufacturers made the largest moves, increasing sales 1.1% compared to 0.4% gains for retailers and a slight 0.1% uptick for merchant wholesalers. In the last year, 6% gains for retailers provided the primary push for an overall 4.6% increase in total business sales.

As sales headed higher, inventories increased a seasonally adjusted 0.4% to $1,662 billion, the highest increase since January. Analysts had expected a 0.3% rise after June's revised 0.1% bump.  In the last year, overall inventories are up 3.2%.

To understand the rate at which goods are being made and sold, economists compute an inventories/sales ratio. Since sales increased even more than inventories from June to July, the inventories/sales ratio fell from 1.29 in June to 1.28 for July. The July 2012 ratio clocked in at a slightly higher 1.30 reading.

Inventories To Sales Ratio

Source: Census.gov 

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