Wholesale Inventories Rise Mildly as Manufacturers Hedge

april wholesale inventories containers manufacturing economy recovery
Patrick Semansky/AP
By MARTIN CRUTSINGER

WASHINGTON -- U.S. wholesalers increased their stockpiles in April and their sales rebounded from a big decline in March, positive signs for economic growth.

The Commerce Department said Tuesday that stockpiles at the wholesale level rose 0.2 percent in April. That followed a 0.3 percent gain in March.

Sales in April increased 0.5 percent, the best showing since February. In March, sales had plunged 1.4 percent. The April increase left stockpiles at the wholesale level at $504.8 billion. That's up 4.1 percent from a year ago and 31.2 percent above the recession low.


An increase in restocking can drive more economic growth. It means companies are ordering more goods from U.S. factories. April's gain was led by a 1.9 percent increase in restocking of autos and auto parts. Stockpiles of furniture, lumber and computer equipment also posted solid gains.

Inventories of machinery, farm products and chemicals were down in April.

The economy grew at a 2.4 percent rate annual from January through March, up from a 0.4 percent rate in the previous quarter.

Growth accelerated in the first quarter largely because consumer spending rose at the fastest pace in more than two years. That also provided more incentive for businesses to restock their shelves after many cut back on inventory building at the end of last year.

Many economists believe growth has slowed in the current April-June quarter to an annual rate of 2 percent or less. Economists say part of that reflects a slowdown in production at U.S. factories, stemming from weakness overseas that has dampened demand for U.S. exports. Some economists also say businesses could be worried about the impact of federal spending cuts.

A stronger job market has helped offset some of the weakness from the spending cuts and higher taxes.

The Labor Department reported Friday that the economy created 175,000 jobs in May. The unemployment rate edged up from 7.5 percent to 7.6 percent, however the gain reflected more people entering the work force to look for jobs. Economists viewed that development as a healthy sign.


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