WASHINGTON (AP) — Steady sales gains may have persuaded wholesale businesses to restock their warehouses in July, a trend that could boost economic growth.
Economists expect that sales by wholesale businesses rose 0.4 percent in July compared to June, according to a survey by FactSet. That would mark the third straight gain in sales.
Wholesalers cut their stockpiles from April through June, despite the increase in sales. The stagnant level for stockpiles could be setting the stage for inventory rebuilding in coming months. That would support increased factory production and overall economic growth in the second half of this year.
The economy grew at a 2.5 percent annual rate in the April-June quarter. Restocking by all businesses added 0.6 percentage points to growth in the second quarter, although that also covers retailers, manufacturers and farmers.
Economists say that stronger auto sales could help boost stockpiles in the coming months and help support economic growth in the second half of the year.
In June, stockpiles at the wholesale level were $499.7 billion. That's up only 2.9 percent from a year ago but 29.3 percent higher than the recession low in 2009
In its latest outlook, 43 top forecasters with the National Association for Business Economics said they expected economic growth to slow just slightly in the July-September quarter. They predict an annual rate of 2.3 percent. But the forecasters expect growth will accelerate in the October-December quarter to an annual rate of 2.6 percent.
The NABE forecasting panel sees better prospects for 2014. They predict the economy will grow 4 percent. That would be the best showing so far in what has been a half-speed recovery since the Great Recession ended in June 2009.