WASHINGTON (AP) — U.S. wholesale businesses added to their stockpiles by the largest amount in seven months in November while sales fell.
Inventories held by wholesalers increased 0.8 percent in November after a 0.6 percent rise in October, the Commerce Department reported Friday. It was the biggest uptick in stockpiles since a 1 percent jump in April.
Sales at the wholesale level dropped 0.3 percent in November after no gain in October. It was the biggest decline since a 0.8 percent dip in August.
While businesses could start cutting back on their stockpiling if sales do not improve, economists are forecasting a rebound in coming months that should encourage companies to restock their empty store shelves. Inventory rebuilding supports overall economic growth.
With the November increase, wholesale stockpiles totaled $547.2 billion, an increase of 7.1 percent in the past 12 months.
The rise in inventories included a 0.6 percent increase in auto stockpiles and a 2.6 percent jump in computer equipment.
Part of that optimism stems from a string of strong monthly gains in employment, which means consumers have more income to spend. Moreover the fall in gas prices means shoppers will have more to spend on other items.
In a separate report Friday, the government said that businesses created 252,000 jobs in December, capping the best year for job growth in 15 years. The job gains pushed unemployment down to 5.6 percent in December, the lowest level since mid-2008.
The expected rebound in consumer demand should spur further inventory restocking and provide support for economic growth. Consumer spending accounts for 70 percent of economic activity.
Some economists have been revising higher their expectations for overall growth in the fourth quarter. Some are now saying activity could come in around 3 percent at an annual rate, as measured by the gross domestic product. That projection is up from many initial forecasts for growth of 2.5 percent or less in the fourth quarter.
