Inventories at U.S. wholesalers rose in April at a faster pace than the prior month as companies strove to keep unsold goods in line with demand.
The 0.6 percent gain in stockpiles followed a 0.3 percent increase in March, the Commerce Department reported today in Washington. Sales climbed 1.1 percent in April after rising 0.4 percent a month earlier.
Moderating economic growth combined with a global slowdown may encourage companies to refrain from building up inventories in anticipation of a pickup in sales. Wholesalers had goods on hand to last 1.17 months at the current sales pace, unchanged from the prior month.
“We’re in an uncertain situation with everything going on in Europe,” Jay Bryson, senior global economist at Wells Fargo Securities LLC in Charlotte, North Carolina, said before the report. “You don’t want to be building a lot of inventory. If things don’t turn out really badly and we continue to grow, businesses will wake up.”
The median estimate in a Bloomberg survey of 28 economists called for a 0.4 percent gain. Forecasts ranged from no change to an increase of 1.1 percent.
Wholesalers make up about 30 percent of all business stockpiles. Factory inventories, which comprise about 38 percent of the total, were little changed in April after a 0.1 percent rise, the Commerce Department said on June 4. Retail stockpiles, which make up the rest, will be included in the June 13 business inventory report.
Wholesalers’ inventories of durable goods, or those meant to last several years, rose 1.1 percent, today’s report showed. Sales of durable goods increased 0.1 percent, led by car sales, which jumped 3.8 percent.
Stockpiles of non-durable goods fell 0.1 in April following a 0.6 percent decline in March.
Stockpiles contributed less to economic growth in the first three months of 2012 than in the fourth quarter. The world’s largest economy expanded at a 1.9 percent annual rate in the first quarter, slower than the fourth quarter’s 3 percent pace. Stockpiles contributed 0.21 percentage point to gross domestic product during the period, down from 1.81 percentage points in the final three months of 2011.
Customers remain cautious, said Tim Johnson, senior vice president of Big Lots Inc., a Columbus, Ohio, retailer that sells excess and closeout goods.
“We still see a consumer out there who is making some tough choices,” Johnson said at a June 5 conference. “We think there is still a little bit of anxiety, a little bit of caution on the part of the consumer.”