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Business

Wholesale inventories rise, sales drop

WASHINGTON -- Wholesale companies added to their stockpiles for a 17th straight month in May, but their sales declined for only the second time in the past 11 months, providing further evidence of the economy's spring slowdown.

The Commerce Department said Friday that wholesale inventories rose 1.8 percent in May, the biggest gain since October. Some of that increase reflected an unwanted buildup of goods because sales declined.

Sales at the wholesale level fell 0.2 percent, the report said. The sales drop was led by a big decline in auto sales, and the inventory buildup also reflected a large rise in auto stockpiles.

The weakness in May sales offered the latest evidence that the economy slowed in the spring as consumers struggled with soaring gas prices and high unemployment.

U.S. manufacturing has been one of the strongest sectors of the economy since the recession ended two years ago, with factory production being supported by concerted efforts on the part of businesses to restock depleted shelves. With the May rise in inventories, stockpiles are now 18.9 percent higher than their low point hit in September 2009. ---- AP

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