Inventories of U.S. wholesalers rose in May as warehouses were restocked with machinery and other durable goods, while sales registered their first decline in 14 months.
Wholesale inventories rose 0.5% to a seasonally adjusted $398.81 billion, after increasing by a downwardly revised 0.2% during April, the Commerce Department said Friday. Originally, April inventories were estimated to have registered a 0.4% gain.
The latest buildup of inventories matched Wall Street analyst expectations.
Sales of U.S. wholesalers decreased 0.3% in May to a seasonally adjusted $350.65 billion after a revised 0.9% jump in April, the data showed. Originally, April sales were estimated to have climbed 0.7%.
The amount of wholesale goods on hand relative to sales edged up in May to 1.14, from a record low of 1.13 the month before.
Inventories have been on the rise recently as wholesalers and other businesses are rebuilding stockpiles that were whittled down during the recession. Wholesalers account for about 30% of all business inventories in the U.S. with manufacturers and retailers making up the rest.
The stockpiling has been a driver of the pickup in manufacturing, accounting for more than half of the 2.7% expansion in first-quarter growth. However, the Institute for Supply Management’s latest manufacturing index showed a slowdown in activity to 56.2 in June from 59.7 in May amid a contraction in inventories.
On a year-over-year basis, inventories were down 2.1%, while sales were 15.1% higher than in May 2009.
Wholesalers’ inventories of durable goods — meant to last three or more years — increased 0.7% in May, after rising 0.3% the month before. Durable goods sales increased 0.5%, following a 2.0% jump in April. The 1.7% gain in machinery inventories was the biggest since September 2008, while electrical and computer equipment also rose. Nondurable goods inventories increased by a more modest 0.1% in May, while sales fell 1.0%. Petroleum stocks slid 6.0%, the biggest drop since December 2008, while sales declined 0.3%.
By TOM BARKLEY And JEFF BATER
Tags: business, commerce department, economic, financial system, inventory, us economic, us manufactured, us stocks, wall street, wholesale
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