According to analysts at Nomura, US business inventories likely rose only modestly in June.
Key Quotes
“During the month, growth in manufacturers’ inventories was only moderate, up 0.1% m-o-m, as durable goods inventories remained soft. Retail and wholesale inventories were soft as well, based on advance estimates by the Census Bureau.”
“The June reading of aggregate business inventories will likely be in line with inventory drawdown during Q2, which was a drag on real GDP growth. However, the Q2 inventory drawdown could result in restocking activity during Q3, adding upward pressure on Q3 GDP growth.”
“NAHB housing market index: We expect a decline of 1.0pp to 67 in the NAHB housing market index for August. Home builders’ sentiment has been supported by strong demand for housing. However, supply-side headwinds such as rising building material costs and skilled construction labor shortage have been concerns for home builders. Further, concerns about the US-China trade tensions can possibly weigh on home builders’ sentiment. The NAHB expressed concerns over the supply-side effect of proposed tariff on $200bn in imported goods from China. The NAHB indicated that nearly 500 products used in residential construction have been targeted in this list and the impact tariff on material costs would be material. While demand for new home is still strong, it appears that trade concerns could meaningfully impact home builders’ sentiment.”
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