WASHINGTON - U.S. businesses added to their stockpiles in May, while sales rose for a third straight month.
Business stockpiles in May edged up 0.3 per cent from the previous month on a seasonally adjusted basis, the Commerce Department reported Tuesday. The result may indicate that businesses are optimistic about future sales.
Sales in May were up 0.4 per cent following gains in March and April. Before March, sales had posted seven straight monthly declines.
Economists are forecasting sales to keep rebounding in the second half of this year and that consumer spending will help lift overall economic growth. However, a separate report Tuesday showed that retail sales in June fell 0.3 per cent as consumers cut back their spending at stores and restaurants.
Despite the disappointing retail sales result, which followed a robust 1 per cent gain in May, analysts said they are still hopeful that consumers will ramp up their spending in coming months based on rising incomes from strong job gains over the past year.
The economy went into reverse in the first quarter, shrinking at an annual rate of 0.2 per cent. That decline in the gross domestic product was the result of an unusually harsh winter that kept consumers away from shopping malls and disrupted other economic activity as well.
Analysts are forecasting a bounce back in the April-June period to 2.5 per cent growth.
The increase in stockpiles in May left inventories at a seasonally adjusted $1.8 trillion, an increase of 2.4 per cent from May 2014.