April business inventories edged up
WASHINGTON – Stockpiles held by U.S. businesses edged up slightly in April, while sales jumped by the largest amount in two months.
Business inventories increased 0.1 percent in April following a 0.3 percent gain in March, the Commerce Department reported Tuesday. Total business sales rose 0.9 percent in April after a 0.2 percent sales increase in March. It was the best showing since a 1.1 percent sales advance in February.
A slowdown in restocking empty store shelves was a drag on overall economic growth the past two quarters, but analysts are hoping stronger sales will give businesses more confidence to replenish their inventories in coming months, helping to boost growth.
In April, inventories held at the wholesale level rose 0.6 percent, the only category to show a gain. Stockpiles held by manufacturers and retailers both dropped 0.1 percent.
In the January-March quarter, the reduction in stockpiling trimmed 0.2 percentage point from growth.
The economy, as measured by the gross domestic product, grew at a lackluster 0.8 percent rate in the first quarter. Economists believe stronger consumer spending will help boost growth to about 2 percent in the current April-June quarter.
In a separate report Tuesday, the government said retail sales increased 0.5 percent in May. Economists see the gains as evidence consumer spending, which accounts for 70 percent of economic activity, is improving after a weak start to 2016.