U.S. wholesale inventories gain revised lower in June

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FILE PHOTO: A shopping cart is seen in a supermarket as inflation affected consumer prices in Manhattan, New York City

(Reuters) - U.S. wholesale inventories increased less than initially thought in June as businesses slowed the replenishment of their stocks as they continue to draw down on excess inventories amid softening consumer spending.

The Commerce Department said on Wednesday that wholesale inventories rose 1.8%, instead of 1.9% as reported last month. Stocks at wholesalers advanced 1.9% in May.

Economists polled by Reuters had expected June inventories would be unrevised. Wholesale inventories increased 25.5% in June on a year-on-year basis.

Inventories are a key component of gross domestic product.

Wholesale motor vehicle inventories rose 2.6% after rising 2.5% in May. Wholesale inventories, excluding autos, increased 1.7% in June. This component goes into the calculation of GDP.

The U.S. economy unexpectedly contracted in the second quarter, with consumer spending growing at its slowest pace in two years and business spending declining. The second straight quarterly decline in gross domestic product largely reflected a more moderate pace of inventory accumulation by businesses.

Business inventories increased at a strong clip in the first quarter just as consumer spending slowed, leaving excess stock to clear before more is ordered.

Sales at wholesalers rose 1.8% in June after increasing 0.7% in May. At June's sales pace it would take wholesalers 1.26 months to clear shelves, unchanged from May.

(Reporting by Lindsay Dunsmuir; Editing by Paul Simao)