WASHINGTON – U.S. wholesale businesses built up their stockpiles of goods in April, a sign that companies expect stronger economic growth in coming months.
The Commerce Department said Tuesday that wholesale stockpiles expanded 1.1 percent in April, after a 1.1 percent gain in March. It’s the 10th straight month 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 is expected to 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 largely because of the harsh 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 could 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 entire year.