WASHINGTON – U.S. businesses increased their stockpiles slightly in March, as sales picked up for the first time since July.
The Commerce Department said Wednesday that business stockpiles rose 0.1 per cent in March after a 0.2 per cent gain in February. Sales rose 0.4 per cent in March, ending seven straight months of declines or no gains. Over the past 12 months, sales have fallen 2.1 per cent.
The inventories reflect expectations by business of future customer demand, possibly signalling whether the economy is strengthening or weakening.
Economic growth has basically stalled during the first three months of the year. Gross domestic product increased at an annual rate of only 0.2 per cent during the first quarter.
But the modest increase in business inventories, coupled with other lukewarm indicators, led the bank Barclays to project that revisions will show the economy actually shrank at a 0.8 per cent rate at the start of 2015.
Economists forecast that growth should rebound in the coming months as the impacts from a harsh winter and a stronger dollar begin to fade.
There are signs that the economy is starting to heat up. Employers added 223,000 jobs in April, a strong rebound after gains totalled a mere 85,000 in March, the Labor Department said Friday.
But a separate report released Wednesday showed that additional hiring hasn’t fueled retail sales growth. The Commerce Department said that retail spending was unchanged between April and March, a sign that factors beyond the harsh winter may be weighing on the economy because the anticipated spring upswing has failed to appear.