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US businesses increase stockpiles in July

In this Tuesday, Aug. 22, 2017, photo, a customer looks at shoes at a Foot Locker in New York. On Friday, Sept. 15, 2017, the Commerce Department reports on business stockpiles in July. (AP Photo/Mark Lennihan)
September 15, 2017 - 7:10 AM

WASHINGTON - U.S. businesses increased their stockpiles in July, but at a slower pace than in June. Sales also rose by a small amount.

Business inventories rose by a seasonally adjusted 0.2 per cent in July, following June's gain of 0.5 per cent, the Commerce Department said Friday. The June increase in inventories was the most since a 0.9 per cent gain in November of last year.

Sales rose 0.2 per cent in July, matching the June gain.

Economists expect that inventory growth will strengthen further in coming months and help support overall economic expansion.

Annual GDP growth improved to 3 per cent in the second quarter of 2017. That follows a lacklustre 1.2 per cent expansion in the first quarter, which was slowed partly because inventories subtracted from overall economic activity.

Economists believe businesses rebuilding their stockpiles could add as much as a half percentage point to overall economic growth in the current quarter.

When businesses increase stockpiles, it is generally seen as a sign of their confidence that sales will increase in the coming months. A decrease in inventories can be a sign of pessimism about future sales.

July inventory gains were led by a 0.6 per cent increase in stockpiles at the wholesale level and a 0.2 per cent uptick in the manufacturing sector. Those increases helped offset a 0.1 per cent drop-off in retail inventories.

News from © The Associated Press, 2017
The Associated Press

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