US: Modest boost to Q2 GDP from inventories - Wells Fargo

US inventories data released on Monday, signals a modest boost to Q2 GDP according to analysts at Wells Fargo. 

Key Quotes: 

“Business inventories added another 0.4 percent in May with higher stockpiles in every category, particularly merchant wholesalers, which was up 0.6 percent. The brisk pace of sales suggests that this does not appear to be unintended inventory building.”

“Another indication of the turnover in stockpiles is the ratio of inventories to sales. This measure has been trending lower since the start of 2016. In the past couple of years, a relatively slow, steady build in inventories has translated into uncharacteristically docile rate of change and as a result, inventories have not been a significant driver of growth. We look for a modest boost of less than half a percentage point from inventories in Q2 GDP.”