U.S. businesses reduced inventories at the wholesale level for a record 10th consecutive month in June, a decline that has contributed to the longest recession since the second world war. The Commerce Department reported Tuesday that wholesale inventories fell 1.7 percent in June, nearly double the increase economists had expected. But in an encouraging sign, wholesale sales rose 0.4 percent for a second straight month, the first consecutive increases in a year. The hope is that a rebound in sales will encourage businesses to change from reducing their inventories to building up stockpiles to meet rising demand. Such a change would create rising orders to U.S. factories, helping to support a revival of the overall economy. June's 1.7 percent drop in inventories followed a 1.2 percent fall in May. The ten-month period of consecutive declines surpassed the old record of nine consecutive declines from June 2001 to February 2002, during the last recession. Wholesale inventories are goods held by distributors who generally buy from manufacturers and sell to retailers. They comprise about one-quarter of all business supplies. Factories hold another one-third of inventories, and retailers hold the remainder.
