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Business Inventories Rose In April Despite Slowdown

Thu, 06/09/2011 - 9:23am
Martin Crutsinger, AP Economics Writer

WASHINGTON (AP) — Wholesale companies added to their stockpiles in April for a 16th straight month, a sign that businesses were confident in future sales gains. However, fresh data since then has shown the economy has weakened, suggesting supply levels could shrink in the months to come.

Inventories rose 0.8 percent in April to $447.2 billion, the highest level since October 2008, the Commerce Department reported Thursday. Sales increased 0.3 percent to $395.5 billion, marking the ninth sales gain in the past 10 months.

Companies boosted their stockpiles of furniture, machinery, paper, clothing and chemicals. Stockpiles of autos, lumber and computer equipment declined.

Wholesale inventories have increased 16.6 percent since hitting a low in September 2009. U.S. manufacturinghas been one of the strongest sectors of the economy since the recession ended two years ago.

But a report from the Institute for Supply Management showed that factory activity cooled in May, expanding at the slowest pace in 20 months. Supply disruptions stemming from the Japan crises have led to shortages of auto and electronics parts. High gas prices are also hurting consumer spending, which makes up 70 percent of economic activity.

Economists said they expect manufacturing to continue growing, but they cautioned that gains in coming months may be smaller.

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