By Josh Boak Associated Press
WASHINGTON — U.S. wholesale businesses built up their stockpiles of goods in April, a sign that companies expect stronger economic growth in the coming months.
The Commerce Department said Tuesday wholesale stockpiles expanded 1.1 percent in April, following a 1.1 percent gain in March. The result marks 10 straight months of rising inventories.
Sales at the wholesale level climbed 1.3 percent, led by autos, furniture and pharmaceutical drugs. Sales rose 1.6 percent in March. Year-over-year, sales are up 6.7 percent.
Because sales have roughly kept pace with the higher inventories, companies will likely need to continue restocking their shelves to meet rising consumer and business demand. That should help to fuel faster economic growth as more factories crank up their production and the spending ripples through the broader economy.
The Commerce Department report covers inventories held at the wholesale level. In a later report, the government will detail inventories at the manufacturing and retail levels.
The economy shrank in the January-March quarter due largely to the cold winter. Gross domestic product fell 1 percent in the first three months of 2013. Most economists expect the economy to accelerate over the coming months, as warmer weather fuels increased auto buying and hiring.
Employers added 217,000 jobs in May and 282,000 in April, the Labor Department said Friday. The 6.3 percent unemployment rate and continued job growth should lead to more robust growth.
The forecasting firm Macroeconomic Advisers estimates that the U.S. economy will grow at annual clip of 3.9 percent in the April-July quarter and 2.4 percent over the course of the entire year.