WASHINGTON (July 10, 2013)--U.S. wholesalers cut back on restocking in May even as sales rose, indicating economic growth could pick up later this year as they rebuild their stockpiles, the U.S. Commerce Department said Wednesday.
The Commerce Department says wholesale stockpiles shrank 0.5 percent in May, the most in 20 months, after a 0.1 percent decline in April, which was revised lower.
Sales jumped 1.6 percent in May and 0.7 percent in April.
A reduction in stockpiles could lead economists to reduce growth forecasts for the April-June quarter, but the steady gain in sales suggests companies will have to order more goods in the coming months to restock their shelves.
That could boost factory production and drive more economic growth.
Wholesale stockpiles totaled $500.9 billion in May, 3.3 percent higher than a year ago.