Alan Diaz, Associated Press
WASHINGTON — U.S. companies restocked their shelves at a much slower pace in February than January, a sign they expected consumer and business spending to weaken.
Business stockpiles increased only 0.1 percent in February, the Commerce Department said Friday. That's the smallest gain since June and down from a 0.9 percent increase in January, which was revised slightly lower.
Total business sales rose at a healthy 1.2 percent pace in February, mostly because retail sales grew. But a separate report Friday showed retail sales fell 0.4 percent in March.
Restocking helps drive economic growth. When companies order more goods, factory output increases. Economists had expected a bigger gain in stockpiles in February, so the lackluster increase could lead some to pare back their economic growth forecasts for the January-March quarter.
Prior to the February report, many had been predicting growth accelerated in the first quarter to an annual rate of roughly 3 percent. Even slightly slower growth would be better than the expansion rate of just 0.4 percent rate in the October-December quarter. Growth was held back in the fourth quarter by weaker restocking and steep cuts in defense spending.
Economists expect consumer spending rose from January through March, helped by strong gains in February. But the weaker retail spending in March signals growth may slow in the April-June quarter.
Job growth is also a question. Businesses stepped up hiring over the winter, adding an average of 220,000 jobs from November through February. But employers added just 88,000 net jobs in March, which likely weighed on spending last month, too.
Friday's report covers a broader range of companies than the wholesale report. It measures stockpiles held by manufacturers, wholesalers and retailers
- The best Christian workplaces in 2015
- There's a bipartisan new approach to curbing...
- Dave Ramsey says: Face the future with a...
- AT&T, as new owner of DirecTV, offers...
- Who wins and loses under Obama's stricter...
- In the 21st century, 'spiritual branding' is...
- How Facebook plans to change the world with...
- Salt Lake County cities, school districts...
- Why the 9 to 5 factory work isn't... 18
- Salt Lake County cities, school... 18
- Who wins and loses under Obama's... 13
- Higher wages a surprising success for... 11
- Sex and violence harm rather than help... 5
- Contractor fined for employing children... 4
- There's a bipartisan new approach to... 3
- Which Utah city is ranked highest for... 2