Wholesalers increase stockpiles for 3rd month

WASHINGTON — U.S. wholesalers increased their stockpiles in September for the third straight month, an indication that they expect more demand from businesses and consumers.

Wholesale stockpiles rose a seasonally adjusted 0.4 percent, the Labor Department said Friday. That follows an increase of 0.8 percent in the previous month. August’s increase was the highest in seven months.

Sales at wholesale businesses rose 0.6 percent in September, up from 0.4 percent in August.

Stockpiles of computer equipment and machinery increased. Inventories of consumer items such as groceries, clothing and beer, wine and other alcoholic beverages also rose.

Strong restocking helped drive the economy’s 2.8 percent annual growth rate in the July-September quarter. Rising stockpiles contributed 0.8 percentage point to growth.

Rising stockpiles boost growth because it means factories have produced more goods. And rising sales among wholesalers shows businesses are unlikely to get caught with too many unsold goods on their shelves.

Still, the gains may not last. Consumers and businesses have been spending at a cautious pace. If that continues, companies won’t need to keep building stockpiles at the same rapid pace as they did in the third quarter.

Consumers increased their spending at just a 1.5 percent annual rate in the July-September quarter, the slowest pace in more than two years. And businesses actually reduced their purchases of new equipment.

Those trends suggest that companies won’t need to add much to their stockpiles in the October-December quarter. Inventory changes may even subtract from growth.

As a result, economists at Bank of America Merrill Lynch have cut their forecast for fourth-quarter growth to an annual rate of 1.7 percent, down from a 2 percent rate.

More in Herald Business Journal

Aerospace workers adjust to changing industry

The number of Boeing workers dropped almost 10 percent since last year.

Tom Hoban
Are millennials warming up to life in suburbia?

They dominate the apartment market and their wants need to be accounted for, says columnist Tom Hoban.

Camano artist mixes flask, paintings for successful cocktail

Art flasks prove popular as bachelorette gifts, birthday presents and wedding favors.

Fluke’s T6 Electrical Testers receives Innovation Awards honor

Fluke’s T6 Electrical Testers have received top honors in the Tools and… Continue reading

Everett volunteer named ‘community champion’ by Molina Healthcare

Everett’s Jorge Galindo was one of seven people across the state to… Continue reading

Cascade Valley Health to hold Festival of Trees in Arlington

Cascade Valley Health Foundation will be holding their fifth annual Festival of… Continue reading

7-Eleven program helped add 500 trees, shrubs to Everett park

Last month, 7-Eleven helped plant more than 500 trees and shrubs at… Continue reading

Pentagon inspector general praises secret $80 billion bomber

US Government Accountability Office in 2016 rejected a protest filed by Boeing-Lockheed Martin.

Everett’s Sentry Credit celebrates a quarter century in business

Sentry Credit Inc. in Everett is celebrating its 25th year in business.… Continue reading

Most Read