WASHINGTON (AP) — U.S. businesses increased their stockpiles by a moderate amount in February although total business sales were weak for a seventh straight month.
Businesses boosted stockpiles 0.3 percent in February after no growth in January, the Commerce Department reported Tuesday. Sales were flat in February following a 2.3 percent plunge in January. Sales by businesses have either fallen or been flat for the past seven months with the last increase coming in July.
Economic growth has been slow over the past six months but economists are looking for a rebound in the current April-June quarter, led by stronger consumer spending. Analysts expect solid job growth will boost incomes and that will translate into stronger spending.
A separate report Tuesday showed that retail sales increased 0.9 percent in March, reflecting stronger sales of autos, furniture, clothing and building materials. It was the first increase after three months of declines.
Economists expect growth will rebound in the April-June quarter to around 3 percent after a weak fourth quarter, when the overall economy expanded by just 2.2 percent and what is expected to be an even weaker January-March period. Many analysts believe growth slowed in the first quarter to around 1 percent or less, reflecting in part a harsh winter which kept shoppers away from stores.
Many analysts expect growth will average a healthy 3 percent for the rest of the year although there are risks to that forecast. One threat is that exports will falter because of a sharp rise in the value of the dollar. A stronger dollar makes U.S. goods more expensive on overseas markets and this could cost U.S. companies sales against their foreign competitors.
The inventory report showed that stockpiles held by retailers were up 0.4 percent while wholesale inventories rose 0.3 percent and manufacturing stockpiles edged up 0.1 percent.