U.S. wholesale inventories fall more than previously reported

October 7, 2016 10:13 AM EDT

A pile of tomatoes is seen on display at a wholesale produce market in Washington, June 12, 2008. REUTERS/Jim Young

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WASHINGTON, Reuters - U.S. wholesale inventories in August fell more than previously reported as businesses ran down their stocks of farm goods and clothes, the Commerce Department reported on Friday.

Inventories dropped 0.2 percent during the month, the department said.

A drop in inventory investment weighed heavily on economic growth in the second quarter, and some economists believe the inventory correction is close to running its course.

But stocks have edged lower in the first two months of the third quarter, which could drag on economic growth during the period.

The department's new monthly advance economic indicators report published last month had estimated that wholesale inventories fell 0.1 percent in August. Economists polled by Reuters expected that reading to be unrevised on Friday.

The component of wholesale inventories that goes into the calculation of GDP - wholesale stocks excluding autos - fell 0.3 percent in August.

Sales at wholesalers rose 0.7 percent in August, boosted by auto and farm product purchases.

At August's sales pace it would take wholesalers 1.33 months to clear shelves, up from 1.34 months in July.

(Reporting by Jason Lange; Editing by Paul Simao)

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