Wholesale Supply Falls 0.3%

Inventories at U.S. wholesalers unexpectedly dropped for a second straight month in May, the government said Wednesday, as sales also sagged.

The Commerce Department said wholesale stocks fell 0.3% in May, as inventories of durable goods -- those meant to last three or more years -- and nondurable products slipped. Wall Street economists had expected inventories to rise 0.2% after a revised 0.3% slide in April.

Wholesale sales also slid. They fell 0.5% after a revised 2.5% decline in April.

The wholesale inventory report provides a look at the supply situation in one of three major sectors of the economy. Factory inventories fell by 0.1% in May, the Commerce Department reported earlier in the month. Inventories at retailers will be reported in a report Wednesday.

The wholesale inventory-to-sales ratio, a measure of how closely product supplies match demand, held steady in May at 1.24.

The inventory drop was led by declines in stocks of autos, electrical equipment, hardware and groceries. Petroleum inventories rebounded sharply, rising 3.7% after a 6.3% drop in April.

On the sales side, a 0.7% drop in sales of nondurable items accounted for much of the overall decline. Wholesale petroleum sales dropped 3.7%, a moderate decline after April’s record decline of 25.8%.