Business slice back on stockpiles as sales fell again

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Source:   —  April 13, 2016, at 6:13 PM

Business inventories dropped 0.1 percent, matching the decline in January, the Commerce Dept reported Wednesday. Sales fell 0.4 % in Feb after an even bigger 0.8 % decline in January.

Business slice back on stockpiles as sales fell again

Businesses reduced their stockpiles for a second straight mo in February, while sales fell for a seventh month.

Business inventories dropped 0.one percent, matching the decline in January, the Commerce Dept reported Wednesday. Sales fell 0.4 % in Feb after an even bigger 0.8 % decline in January. Sales have been heading S since August.

The weakness in inventory building has been holding back overall growth. It trimmed growth by 0.2 percentage point in the fourth quarter, and economists expect the slowdown in stockpiling to subtract an even larger 0.6 percentage point from first quarter growth.

The overall economy, as measured by the gross domestic product, grew by just 1.4 % in the fourth quarter. Economists are forecasting growth to arrive in below 1 % in the first quarter.

U. S. manufacturers have seen exports fall as weakness in major overseas markets cuts into sales. American producers have also been damage by a rising cost of the dollar which makes U. S. goods more expensive in foreign markets.

There are hopes that feeble foreign demand will be offset by strength in domestic demand, fueled by rising consumer spending.

However, a separate report Wednesday showed that retail sales fell 0.3 % in March as Americans slice back on car purchases. Sales had been flat in Feb and down in January. Consumer spending accounts for seventy % of economic activity.

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