Wholesale inventories are goods held by distributors

Wholesale inventories are goods held by distributors who generally buy from manufacturers and sell to retailers. They make up about 25 percent of all business stockpiles. Factories hold another third of inventories and retailers hold the rest.

Wholesale inventories have been falling since last September as the economic downturn that began in December 2007 grew more severe following the financial crisis that hit last fall.

On an annual basis, domestic china wholesale trade plunged 28.1% in the second quarter. After adjusting for price changes, domestic wholesale trade volume recorded an annual growth of 3.2%.

Further, the report showed that foreign wholesale trade grew 6.7% in the second quarter compared to first quarter with most major sectors recording higher sales. Meanwhile, foreign wholesale trade dropped 31.6% from the second quarter of 2008.

The consensus of economists surveyed by Thomson Reuters is that inventories held by wholesalers dropped by 0.9 percent in June, following an 0.8 percent decline in May as businesses continued to reduce their stockpiles in the face of slowing sales. The Commerce Department is scheduled to release the report at 10 a.m. EDT Tuesday.