WASHINGTON (Reuters) - U.S. wholesale inventories increased solidly in May, likely putting inventory investment on track to support economic growth in the second quarter.
The Commerce Department's Census Bureau said on Wednesday that wholesale inventories rose 0.6% as previously estimated last month. Stocks at wholesalers rose 0.2% in April.
Economists polled by Reuters had expected that inventories, a key part of gross domestic product, would be unrevised. Inventories fell 0.5% on a year-on-year basis in May.
Private inventory investment has been a drag on GDP for two straight quarters as businesses carefully managed stocks and domestic demand remained strong.
There is cautious optimism that inventory accumulation could offset some of the anticipated hit on GDP from a widening trade deficit. Growth estimates for the second quarter are around a 2% annualized rate. The economy grew at a 1.4% pace in the January-March quarter.
Wholesale motor vehicle inventories rose 1.4% in May. Excluding autos, wholesale inventories rose 0.5%. This component goes into the calculation of GDP.
Sales at wholesalers rose 0.4% in May after rising 0.2% in April. At May's sales pace it would take wholesalers 1.35 months to clear shelves, the same as in April.