US business inventories rose in June to their highest level in a year while sales fell, suggesting consumer demand may have been weaker than firms had anticipated. The Commerce Department said on Friday inventories climbed 0.3 percent to $1.36 trillion, the highest since May 2009. That followed a 0.2 percent gain in the prior month, and exceeded Wall Street forecasts for a 0.2 percent rise.
Inventories are a key component of gross domestic product changes over the business cycle, and the rebuilding of merchandise stock from record low levels has been a key driver of the economy's recovery from the worst recession since the 1930s.
But some economists worry waning demand might leave some firms with more goods than they can sell, and the report showed business sales falling 0.6 percent to $1.08 trillion, the lowest reading since February. The inventory-to-sales-ratio, which measures how long it would take to clear shelves at the current sales pace, was 1.26 months, the highest since a matching ratio in February 2010.