Highlights
Destocking continues at an uninterrupted pace, a trend that may soon shift from being a positive for the economy to being a big negative -- especially for jobs. Business inventories fell 1.1 percent in June to extend a long string of declines including a 1.2 percent drop in May. Retail inventories, the new data in today's report, fell 1.0 percent and are very likely to have fallen in July as well given today's disappointing retail sales data. Inventories at auto dealers showed another steep drop, at 2.8 percent. Given the strong cash-for-clunker sales, dealer inventories likely dropped in July as well.

Previously released components in the business inventory report are factory inventories, down 0.8 percent, and wholesale inventories, down 1.7 percent. Improvement in manufacturing and improvement in housing have raised hopes that economic recovery is nearing, but the nation's businesses are definitely not banking on it, instead they continue to destock at an aggressive pace which means continued shutdowns through the supply chain and no let up in related job losses.

Market Consensus Before Announcement
Business inventories in May dropped 1.0 percent after decreasing 1.3 percent the month before. Business inventories have fallen for nine straight months through May. Businesses have been destocking at a greater rate than sales have falling. More recently, factory inventories fell 0.8 percent in June. We will get wholesale inventories for June on August 11. At this point, we are likely to get another dip in inventories in June.

2009 Release Schedule

Released On: 1/14 2/12 3/12 4/14 5/13 6/11 7/14 8/13 9/15 10/14 11/16 12/11 Released For: Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct