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Economy

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Businesses boost stockpiles: U.S. businesses restocked their shelves and warehouses in July at the fastest pace since January as their sales rose, a hopeful sign for economic growth.
The Commerce Department says business stockpiles increased 0.4 percent in July from June, after ticking up just 0.1 percent the previous month. Total business sales rose 0.6 percent in July, up from just 0.2 percent in June.
Rising stockpiles can be a good sign for the economy because they suggest companies expect greater sales. Greater inventory building also means businesses likely ordered more goods, boosting factory production and economic growth. And higher sales mean that companies are less likely to be stuck with excess goods.
Business stockpiles in July stood at a seasonally adjusted $1.66 trillion, 3.2 percent higher than a year ago.
Wholesale stockpiles rise
: U.S. wholesalers increased in their stockpiles only slightly in July after three monthly declines, while their sales barely rose. The tepid gains add to worries about slower economic growth in the July-September quarter.
The Commerce Department said Wednesday that wholesale stockpiles rose just 0.1 percent in July from June. That followed a 0.3 percent decline in June.
Sales rose just 0.1 percent in July, the smallest gain since December. Still, that’s the fourth straight month that sales have risen.
– Associated Press
Associated Press
10-year-old Raegan Jackson picks out a backpack while shopping at Target in Lynchburg, Va., last month. The government report on sales at U.S. retailers showed a slight 0.2 percent increase in August, the smallest gain in four months.

August sales see slight gain

Likely enough for Fed to cut back stimulus

– Americans boosted their spending at retail businesses only modestly in August, indicating that economic growth remains sluggish. Consumers bought more cars, furniture and electronics last month but held back on most other purchases.

Spending at retail businesses rose just 0.2 percent last month, the Commerce Department said Friday. It was the smallest gain in four months. But the government said retail spending was stronger in the previous month than first estimated, revising the July estimate to 0.4 percent from 0.2 percent.

Excluding volatile spending on autos, gas and building supplies, sales in August increased just 0.2 percent, or less than half July’s 0.5 percent gain.

Consumers may be growing more cautious about spending, a trend that could slow economic growth in the July-September quarter. Slow wage growth, modest job gains and higher taxes have limited Americans’ spending power.

Retail sales are closely watched because they’re the government’s first look each month at consumer spending, which accounts for 70 percent of economic activity.

“Consumer spending remained stuck in middle gear in the summer,” said Sal Guatieri, an economist at BMO Capital Markets.

Guatieri forecasts that spending is growing at an annual rate of roughly 2 percent in the current July-September quarter, about the same as the previous quarter. That suggests economic growth is slowing to an annual rate of about 2 percent, down from the 2.5 percent annual rate that the government estimated for the April-June quarter.

Most economists said the retail sales figures are likely healthy enough for the Federal Reserve to begin cutting back its monthly bond purchases when it meets next week. The Fed is buying $85 billion in Treasury bonds and mortgage-backed securities each month to keep interest rates low and spur more borrowing and spending.

Sales of autos and furniture both jumped 0.9 percent in August. Electronics and appliance sales rose 0.8 percent. But clothing sales dropped 0.8 percent.

Last week, automakers reported that their sales in August topped 16 million at an annual pace for the first time since November 2007, just before the recession began. Toyota, Ford, Nissan, Honda, Chrysler and General Motors all posted double-digit gains over last August.

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