Ahead of the Bell: US business inventories

US business stockpiles expected to show moderate gain in June

Associated Press
US business stockpiles jump in June

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In this March 31, 2015 photo, Roy Livesey stacks a pallet of 2x4's at Allegheny Millwork and Lumber Company in Pittsburgh. The Commerce Department releases business inventories for June on Thursday, Aug. 13, 2015. (AP Photo/Gene J. Puskar)

WASHINGTON (AP) -- The Commerce Department reports on June business stockpiles at 10 a.m. Eastern Thursday.

STOCKPILES UP: The expectation is that stockpiles held by businesses increased 0.3 percent, according to a survey of economists by data firm FactSet.

STOCKPILES AND SALES: Growing stockpiles in May suggested that businesses were already growing more optimistic about future sales.

The stockpile report covers inventories held by manufacturers, wholesalers and retailers. An advance report last week showed that wholesalers boosted their stockpiles in June by 0.9 percent, the largest monthly gain since April 2014 but sales at the wholesale level lagged, rising by just 0.1 percent.

The overall economy grew at an annual rate of 2.3 percent in the April-June quarter after nearly stalling out with growth of just 0.6 percent in the first quarter, reflecting the impact a severe winter had on activity.

Economists are forecasting growth will accelerate further in the second half of this year as further strong employment gains give consumers more incentive to increase spending. The rise in sales is expected to convince businesses to restock their shelves which will provide further support for factory production and economic growth.

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