Ahead of the Bell: US Wholesale Inventories

US wholesale sales likely rose at solid pace in May, economists forecast

Associated Press
US wholesalers slow restocking as sales weaken
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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. (AP Photo/Matt Rourke, File)

WASHINGTON (AP) -- The Commerce Department reports how much U.S. wholesale businesses adjusted stockpiles in May in response to their sales. The report will be issued at 10 a.m. Eastern on Thursday.

SALES RISING: Economists forecast that sales by wholesale businesses rose 0.7 percent in May, according to a survey by FactSet. The economists didn't forecast changes in stockpiles.

STOCKPILING BOOSTS GROWTH: Still, rising sales suggests wholesalers will also need to boost their inventories to meet growing demand.

Active restocking by U.S. companies can lift economic growth because it means stronger orders of factory goods, which would boost manufacturing output.

The report due Thursday covers inventories held at the wholesale level. In a later report, 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 that the economy shrank at a 2.9 percent annual rate. That was the biggest 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. Wholesale inventories grew 1.1 percent in April. Total inventories rose 0.6 percent that month, 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.

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