US wholesalers slow restocking as sales weaken

 
 
FILE - In this June 3, 2013 file photo, a worker loads empty cans onto the assembly line the Sly Fox Brewing Company in Pottstown, Pa. The Commerce Department reports, on Thursday, July 10, 2014, how much U.S. wholesale businesses adjusted stockpiles in May in response to their sales.
FILE - In this June 3, 2013 file photo, a worker loads empty cans onto the assembly line the Sly Fox Brewing Company in Pottstown, Pa. The Commerce Department reports, on Thursday, July 10, 2014, how much U.S. wholesale businesses adjusted stockpiles in May in response to their sales.
Matt Rourke, File / AP Photo

AP Economics Writer

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.

Read more Breaking News - Business stories from the Miami Herald

Miami Herald

Join the
Discussion

The Miami Herald is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere on the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. Thank you for taking the time to offer your thoughts.

The Miami Herald uses Facebook's commenting system. You need to log in with a Facebook account in order to comment. If you have questions about commenting with your Facebook account, click here.

Have a news tip? You can send it anonymously. Click here to send us your tip - or - consider joining the Public Insight Network and become a source for The Miami Herald and el Nuevo Herald.

Hide Comments

This affects comments on all stories.

Cancel OK

  • Marketplace

Today's Circulars

  • Quick Job Search

Enter Keyword(s) Enter City Select a State Select a Category