Wholesale sales for June 2019:
- Prior of -1.8% revised to -1.9% (was largest drop in more than 3 years)
- Inventories +1.5% m/m (10th consecutive climb)
- Sales up in 4 of 7 subsectors
- Sales rose 1.3% in Q2 (13th consecutive quarterly gain)
The gains were led by the 'miscellaneous' category, up 3.5% including a 6.7% rise in the agricultural supplies industry. The 'machinery, equipment and supplies' subsector was also solid, up 1.5%. A drag came from motor vehicles, which fell 1.9%.
A worrisome sign is the rise in Canadian inventories. The inventory-to-sales ratio is at 1.45 compared to 1.36 a year earlier. It hasn't been above 1.40 for two consecutive months since 2009. The story there could be inventory building on tariff fears but -- like the rise in UK inventories -- it could lead to a bullwhip effect.
Inventories:
