US wholesalers slow restocking as sales weaken

US wholesalers slow restocking as sales weaken


1 photo
Save Story
Leer en español

Estimated read time: 1-2 minutes

This archived news story is available only for your personal, non-commercial use. Information in the story may be outdated or superseded by additional information. Reading or replaying the story in its archived form does not constitute a republication of the story.

WASHINGTON (AP) — U.S. wholesale stockpiles rose in May at the weakest pace in five months as companies kept their supplies in line with slower sales.

Wholesale stockpiles grew 0.5 percent in May, the Commerce Department said Thursday, down from a 1 percent surge in April. Big gains in inventories of autos, lumber and metals drove the latest increase.

Sales at the wholesale level, meanwhile, rose 0.7 percent, down from 1.3 percent in April. Auto sales jumped 1.1 percent while sales of computers and electrical equipment fell.

The slower pace of sales and restocking suggests that consumer and business demand weakened a bit in May. But the figures also show that companies aren't building up large stockpiles, which can leave them with unsold goods if sales slow further.

And May's increase in inventories can contribute to economic growth because it means more orders of factory goods, which boosts manufacturing output.

Thursday's report covers inventories held at the wholesale level. Next week, the government will detail inventories at the manufacturing and retail levels.

Businesses sharply cut back on restocking in the first three months of the year, a big reason the economy shrank at a 2.9 percent annual rate. That was the largest contraction since the first quarter of 2009, in the depths of the recession.

But companies are now restocking their shelves and warehouses at a faster pace, which should boost growth. Total business inventories rose 0.6 percent in April, the biggest gain in 6 months.

Harsh winter weather in the first quarter shut down factories, disrupted shipping and lowered auto and home sales. Most economists expect warmer weather will help the economy grow again in the second quarter, at about a 2.5 percent to 3 percent annual rate.

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Photos

Most recent Business stories

Related topics

Business
CHRISTOPHER S. RUGABER

    STAY IN THE KNOW

    Get informative articles and interesting stories delivered to your inbox weekly. Subscribe to the KSL.com Trending 5.
    By subscribing, you acknowledge and agree to KSL.com's Terms of Use and Privacy Policy.

    KSL Weather Forecast