US wholesale inventories rise on growth in machinery and farm products

The United States wholesale inventories rose in April, the largest increase in ten months while the stock of machinery and farm products grew as well, suggesting a boost to economic growth in the second quarter.

Wholesale inventories increased 0.6 percent while inventories for March rose to show a 0.2 percent gain instead of the previously reported 0.1 percent rise, data released by the Commerce Department showed Thursday. A Reuters poll of certain economists had forecast wholesale inventories nudging up 0.1 percent in April.

Sales at wholesalers jumped 1.0 percent in April after advancing 0.6 percent in March. With sales increasing on a solid path for a second straight month, it would take wholesalers 1.35 months to clear shelves, down from 1.36 months in March, data showed.

Inventories remain a key constituent in the calculation of gross domestic product. The component of wholesale inventories that goes into the calculation of GDP, wholesale stocks excluding autos, increased 0.8 percent in April.

Meanwhile, inventories have been a drag on the GDP of the economy since the last quarter of 2015. A slight recovery on the cards now seems good for the world’s largest economy. Though the pace of accumulation remained slow, inventories remained on the upside in the second half of 2015 and through the first quarter of 2016.