Wholesale numbers a positive for economy

Sales at wholesalers rose faster than inventories in June, increasing the chances that companies will order more from factories and help offset the housing recession.

Stockpiles gained a greater-than-forecast 0.5%, matching May’s advance, the Commerce Department said Wednesday. Sales climbed 0.6% after a 1.3% increase the previous month.

Businesses had goods on hand to last little more than a month at the current sales pace, matching the record low. The need to replenish stocks will keep orders growing, assembly lines running and the economy expanding at the “moderate” pace predicted by the Federal Reserve, analysts said.

“The inventory picture is a positive in the near term,” said John Shin, an economist at Lehman Bros. Holdings Inc. in New York. Increasing stocks will probably contribute a quarter of a percentage point to the economic expansion in the second half of the year, he estimates.

Wholesalers account for about a quarter of all business inventories.

The value of wholesale inventories rose to $398.5 billion in June from $396.6 billion the previous month. Factory inventories rose 0.3% in June, after increasing 0.4% a month earlier, the Commerce Department said Aug. 2. Retail inventories will be included in the business stockpiles report due Monday.

The increase in sales in June was the smallest since a drop in purchases in January. Still, most analysts estimate inventories are still too lean relative to demand, suggesting the rebuilding of stocks will remain a positive force for growth.

Computer and hardware distributors had the biggest gains in sales relative to inventories. Stockpiles of computer equipment rose 1.1% as sales increased 5.4%. Hardware inventories rose 0.3% and sales climbed 1%.

Inventories of autos rose 1.3% after increasing 1.2% in May. Auto sales fell 0.2%.

Nondurable goods inventories increased 1.2%, led by gains in apparel and groceries. Sales of such goods rose 0.5% after a 2.9% gain a month earlier.