U.S. wholesale businesses increased their inventories for a 19th consecutive month in July, but their sales were flat, the government said Friday in a report that suggests weakening demand could force businesses to reduce orders when the economy is at risk of another recession. The Commerce Department said wholesale inventories rose 0.8 percent in July. Sales were unchanged, the weakest performance since a 0.3 percent decline in May. Shrinking inventories usually suggest that wholesalers will increase factory orders in the coming months, but that is largely dependent on sales. Declining sales could hurt business confidence and cause companies to reduce restocking. Still, economists believe sales will rebound in coming months as the economy mounts a modest recovery from extremely-weak growth in the first half of this year.
