WASHINGTON (AP) -- U.S. businesses boosted their stockpiles in June by the largest amount in more than two years.
Businesses increased their stockpiles by 0.8 percent in June, the biggest increase since January 2013, the Commerce Department reported Thursday.
Economists are hoping that strong gains in employment over the past year will help boost consumer spending in the months ahead, encouraging businesses to keep building their inventories. If consumer demand doesn't rise, businesses could start cutting back on restocking, which would be a drag on the economy
Sales rose a modest 0.2 percent. After seven months of declines, sales have now risen for four straight months. In a separate report Thursday, the government said that retail sales posted a solid gain of 0.6 percent in June.
The stockpile report covers inventories held by manufacturers, wholesalers and retailers.
The June expansion left the ratio of inventories to sales at 1.37, meaning it would take 1.37 months for stockpiles to be depleted at the June sales pace. That is the highest level for inventories since June 2009, the month the Great Recession ended.
The overall economy grew at an annual rate of 2.3 percent in the April-June quarter after nearly stalling out with growth of just 0.6 percent in the first quarter, reflecting the impact a severe winter had on activity.
Economists are forecasting growth will accelerate further in the second half of this year as further strong employment gains give consumers more incentive to increase spending.