Quantcast

US businesses rebuild stockpiles at steady pace - abc27 WHTM

US businesses rebuild stockpiles at steady pace

Posted: Updated:
(AP Photo/Charles Krupa, File). FILE - In this July 1, 2013, file photo, brewer Ken Hermann rolls a fresh keg of beer onto pallets at the Harpoon Brewery in the Seaport District of Boston. (AP Photo/Charles Krupa, File). FILE - In this July 1, 2013, file photo, brewer Ken Hermann rolls a fresh keg of beer onto pallets at the Harpoon Brewery in the Seaport District of Boston.
  • NationalMore>>

  • Fired Ohio State band director vows to clear name

    Fired Ohio State band director vows to clear name

    Friday, July 25 2014 3:23 PM EDT2014-07-25 19:23:40 GMT
    The Ohio State marching band is moving forward without its director; a day after he was fired they're performing with the Columbus Symphony in what's often considered the band's unofficial season kickoff.More >>
    The fired director of Ohio State University's celebrated marching band said through his attorney Friday that he has become a scapegoat for behavior occurring within the organization before his leadership and he'll...More >>
  • Carjacked vehicle hits crowd, killing 2 kids

    Carjacked vehicle hits crowd, killing 2 kids

    Friday, July 25 2014 3:23 PM EDT2014-07-25 19:23:37 GMT
    Two men forced a woman into the backseat of her vehicle at gunpoint, drove off but later lost control and plowed into a group of people on a corner near a fruit stand in Philadelphia on Friday, police said. Two...More >>
    Two men forced a woman into the backseat of her sport utility vehicle at gunpoint, drove off but later lost control and plowed into a group of people on a corner near a fruit stand in Philadelphia on Friday, police said....More >>
  • Official: Hospital gunman intended to kill others

    Official: Hospital gunman intended to kill others

    Friday, July 25 2014 2:57 PM EDT2014-07-25 18:57:26 GMT
    A man who authorities say fatally shot a caseworker at a hospital complex near Philadelphia and was then shot by his psychiatrist remains listed in critical condition.More >>
    A psychiatric patient ranted about a hospital gun ban before opening fire at the suburban medical complex, killing his caseworker and grazing his psychiatrist before the doctor pulled out his own weapon and fired back,...More >>
By CHRISTOPHER S. RUGABER
AP Economics Writer

WASHINGTON (AP) - U.S. companies restocked their store shelves and warehouses at a steady pace in May, a sign they expect sales will remain solid in the months ahead.

Business stockpiles rose 0.5 percent in May, the Commerce Department said Tuesday. That was down slightly from a 0.6 percent gain in the previous month. April's increase was the highest in six months. Total business sales rose 0.4 percent, much lower than April's 0.8 percent gain.

Steady inventory rebuilding can bolster economic growth by increasing demand for manufactured goods and boosting factory production.

Economists generally were encouraged by the report.

"With two months of accumulating stockpiles, we are on track for inventories to boost growth in the second quarter," said Tim Quinlan, an economist at Wells Fargo Securities.

Still, sales need to remain healthy so that companies aren't stuck with unwanted inventories.

For May, inventories at the wholesale level climbed 0.5 percent, while inventories held by retailers ticked up just 0.2 percent. Stockpiles held by manufacturers rose 0.8 percent.

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 since then companies have stepped up their inventory rebuilding. Greater restocking suggests that companies are confident consumer and business spending will grow, and they want to ensure that they have enough goods to meet the demand.

A report earlier Tuesday showed that retail sales increased at a tepid pace of just 0.2 percent in June. But there were also encouraging signs in the report: sales in a category that excludes volatile goods such as autos, gas and building materials increased at a healthy 0.6 percent pace.

More restocking should help the economy resume growing in the April-June quarter. Analysts forecast the economy will expand at a 3 percent annual rate.

Businesses have stepped up hiring this year, which means more Americans will have paychecks to spend, likely boosting growth. Employers have added an average of 230,000 jobs a month in 2014, up from 194,000 last year.

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Powered by WorldNow