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 per cent in April following a 0.3 per cent gain in March, the Commerce Department reported Tuesday. Total business sales rose 0.9 per cent in April after a 0.2 per cent sales increase in March. It was the best showing since a 1.1 per cent sales advance in February.
A slowdown in restocking empty store shelves has been a drag on overall economic growth over the past two quarters. But analysts are hoping that stronger sales will give businesses more confidence to replenish their inventories in coming months, helping to boost economic growth.
In April, inventories held at the wholesale level rose 0.6 per cent, the only category to show a gain. Stockpiles held by manufacturers and retailers both dropped 0.1 per cent.
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 lacklustre 0.8 per cent rate in the first quarter. But economists believe stronger consumer spending will help boost growth to around 2 per cent in the current April-June quarter.
In a separate report Tuesday, the government said that retail sales increased 0.5 per cent in May. Economists see the gains as evidence that consumer spending, which accounts for 70 per cent of economic activity, is improving after a weak start to 2016.