Business stockpiles increase 0.6%

April gain biggest in 6 months as U.S. sales rise 0.7%

Shoppers look at washers and dryers at a Costco warehouse store in Plano, Texas, on June 4. Business inventories rose 0.6 percent after a 0.4 percent March gain, the Commerce Department reported Thursday.
Shoppers look at washers and dryers at a Costco warehouse store in Plano, Texas, on June 4. Business inventories rose 0.6 percent after a 0.4 percent March gain, the Commerce Department reported Thursday.

WASHINGTON -- U.S. businesses increased their stockpiles in April by the largest amount in six months, signaling business optimism that future demand will keep rising.

And more Americans filed for unemployment benefits last week, but claims for unemployment aid remain near pre-recession levels.

Business inventories rose 0.6 percent after a 0.4 percent March gain, the Commerce Department reported Thursday. It marked the 11th consecutive increase in stockpiles and was the biggest advance since October. Total business sales were up a solid 0.7 percent in April after a 1.1 percent rise in March, which had been the biggest monthly sales increase in 10 months.

The encouraging sales gains are expected to prompt businesses to keep ordering more goods to restock their shelves. That rising demand should help factory production and fuel the overall economy.

For April, inventories at the wholesale level climbed 1.1 percent, while inventories held by retailers rose 0.5 percent. Stockpiles at the manufacturing level were up 0.4 percent.

Economic growth went into reverse in the January-March quarter with the economy contracting at an annual rate of 1 percent. Much of that weakness reflected an unusually severe winter.

Economists are looking for growth to rebound to an annual rate of around 3 percent or better in the April-March quarter and remain at a 3 percent level in the second half of the year.

Part of the optimism about growth reflects expectations that employers will keep increasing their hiring, with the extra jobs increasing incomes and supporting stronger consumer spending.

The economy added 217,000 jobs in May, the fourth straight month of a gain of more than 200,000, something that hasn't happened since 1999. The unemployment rate remained unchanged in May at 6.3 percent, the lowest in more than five years.

The Labor Department said Thursday that weekly applications for unemployment benefits rose 4,000 to a seasonally adjusted 317,000. The four-week average, a less volatile measure, increased to 315,250. These figures are near the joblessness claims levels before the start of the recession in December 2007.

"Relatively low layoffs supported good payroll growth in May," said Guy Berger, U.S. economist at RBS Securities Inc. in Stamford, Conn., who correctly projected claims. Thursday's report is "supportive of good employment growth in June."

Applications are a proxy for layoffs, so the claims data show that employers are dismissing fewer workers. When businesses are confident enough to hold onto staff members, they may also step up hiring. Analysts see that as a positive sign for economic growth, as more jobs usually help lift consumer spending.

Information for this article was contributed by Martin Crutsinger and Josh Boak of The Associated Press and Michelle Jamrisko of Bloomberg News.

Business on 06/13/2014

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