U.S. wholesalers increased their stockpiles only slightly in July after three monthly declines, while their sales barely rose. The tepid gains add to worries about slower economic growth in the July-September quarter.
The Commerce Department said Wednesday that wholesale stockpiles rose just 0.1 percent in July from June. That followed a 0.3 percent decline in June.
Sales rose just 0.1 percent in July, the smallest gain since December. Still, that’s the fourth straight month that sales have risen.
Some economists had thought that wholesalers would ramp up their stockpiles in July, after having cut them in several previous months. The smaller increase could weigh on economic growth in the third quarter. More restocking boosts factory production, driving overall growth.
The economy grew at a 2.5 percent annual rate in the April-June quarter. Restocking by all businesses added 0.6 percentage points to growth in the second quarter, although the gain was driven by retailers, manufacturers and farmers.
Many economists believe growth is slowing in the July-September quarter to an annual rate of 2.3 percent, although a handful of July data suggest the figure could be weaker. In addition to the sluggish restocking, businesses cut spending on long-lasting manufactured goods, new-home sales plunged and consumers barely increased their spending.
Wholesale inventories are up 29.4 percent from the low point reached in September 2009, a period when businesses had been trimming stockpiles in the face of falling demand during the Great Recession.
For July, auto stockpiles rose 0.4 percent, furniture inventories increased 1 percent and machinery stockpiles rose 1.9 percent.
The July increase left stockpiles at $500 billion, or 2.2 percent higher than a year ago.