U.S. wholesalers increased in their stockpiles only slightly in July after three monthly declines and their sales improved at the weakest pace in seven months.
The Commerce Department said Wednesday that wholesale stockpiles rose just 0.1 percent in July from June. That followed a 0.3 percent decline in June.
Sales rose just 0.1 percent in July, the smallest gain since December. Still, that’s the fourth straight month that sales have risen.
Some economists had thought that wholesalers might ramp up their stockpiles in July after cutting them from April through July. The tiny increase could add to worries that the current July-September quarter is off to a weak start.
More restocking boosts factory production, driving overall economic growth.
The economy grew at a 2.5 percent annual rate in the April-June quarter. Restocking by all businesses added 0.6 percentage points to growth in the second quarter, although the gain was driven by retailers, manufacturers and farmers.
Many economists believe growth is slowing in the July-September quarter to an annual rate of 2.3 percent, although a handful of July data suggest the figure could be weaker. In addition to the sluggish restocking, businesses cut spending on long-lasting manufactured goods and new-home sales plunged.
Wholesale inventories are up 29.4 percent from the low point reached in September 2009, a period when businesses had been trimming stockpiles in the face of falling demand during the Great Recession.
For July, auto stockpiles rose 0.4 percent, furniture inventories increased 1 percent and machinery stockpiles rose 1.9 percent.
The July increase left stockpiles at $500 billion, or 2.2 percent higher from a year ago.
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