June inventories advance 0.4 percent

Aug 13, 2007 - Inventories at U.S. businesses rose 0.4 percent as expected in June, Commerce Department data released on Monday showed.

The gain in stocks at hand followed an unrevised 0.5 percent rise in May. Sales dipped 0.3 percent in June after climbing 1.3 percent the previous month.

Economists monitor the data for clues on whether businesses are building stocks in anticipation of rising demand, although the judgment is tricky since an increase in inventories can also reflect weaker than anticipated sales.

June's inventory-to-sales ratio, a measure of how long it would take to deplete stocks at the current pace of sales, edged up to 1.27 months' worth from 1.26 in May.

Stocks of motor vehicles and parts mounted 1.0 percent, posting the category's largest monthly increase since June of 2006, when they jumped 1.3 percent. The U.S. auto industry has been forced to bolster sales through a program of aggressive incentives.