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VOL. 129 | NO. 155 | Monday, August 11, 2014

US Wholesale Inventories Rise 0.3 Percent in June

CHRISTOPHER S. RUGABER | AP Economics Writer

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WASHINGTON (AP) – U.S. wholesalers restocked their warehouses at a modest pace in June for a second straight month, a sign they may anticipate slower growth ahead.

The Commerce Department said Friday that wholesale inventories rose 0.3 percent, the same as the previous month. May's inventory gain was revised down from 0.5 percent.

The slowdown in restocking likely reflects weaker wholesale sales. Sales grew just 0.2 percent in June, down from 0.7 percent in May.

In June, companies boosted their stockpiles of furniture, lumber, computer equipment, and steel and other metals. But auto inventories fell, even as sales jumped. That suggests automakers will need to keep cranking out cars to meet strong demand.

The report shows that inventory levels are roughly in line with sales. That means wholesalers likely haven't gone too far in restocking their goods. As a result, they probably won't have to slow restocking in the coming months.

Slower rebuilding of inventories can drag on growth. That's because it means fewer orders for factory goods.

That is what happened in the first three months of the year, when a big downshift in inventory building subtracted 1.2 percentage points from the economy's growth. The economy contracted at a sharp 2.1 percent annual rate. Harsh winter weather and a big drop in exports also contributed to the decline.

The slowdown was temporary, however. Inventory restocking contributed about 1.7 percentage points to growth in the second quarter, when the economy expanded at a 4 percent annual rate.

The report Friday covers inventories held at the wholesale level. In a later report, the government will detail inventories at the manufacturing and retail levels.

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 92 388 9,204
MORTGAGES 119 513 12,365
FORECLOSURE NOTICES 0 98 2,526
BUILDING PERMITS 0 960 20,801
BANKRUPTCIES 77 338 7,964
BUSINESS LICENSES 14 91 3,315
UTILITY CONNECTIONS 180 695 11,718
MARRIAGE LICENSES 33 147 2,815

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