U.S. Economy Shows Positive Signs with Decreased Wholesale Inventories and Increased Sales

More good news for the United States economy comes as the U.S. Commerce Department reports that inventories of wholesalers in the country have declined for the second month in a row as sales are rising.

According to the Commerce Department’s Monthly Wholesale Trade, total inventory stockpiles shrank by 0.5% from April to May, following a 0.1% decrease from March to April. Sales rose by 1.6% from April to May, causing economists to have a positive outlook for the future and feel there’s a strong ending to the second quarter.

“With the drawdown in inventories, if the pace of sales is maintained, we’ll see a pickup in production,” explained Millan Mulraine, director of U.S. rates and research at TD Securities, to Bloomberg.

Nondurable items reported higher sales and lower inventories than durable items, with nondurable sales up 2.8% during the month of May. Apparel saw the biggest sales gains of any individual section of goods, rising 5.3% during the same month.

This good news from the wholesale sector joins a number of positive indicators that have emerged throughout the first half of the year, and the latest edition of the Beige Book — a monthly report from the U.S. Federal Reserve based on anecdotal evidence from businesses around the country — echoes the notion that the U.S. economy is improving.

The report says that overall economic activity has “continued to increase at a modest to moderate pace,” and that manufacturing and other business activities have increased in all but one of the 12 Federal Reserve Districts. Additionally, hiring has either remained steady or increased in most districts.

Looking ahead, many economists believe the economic growth will continue at least through the end of the year. According to an AP report, the most recent Associated Press Economy Survey finds that economist predict growth will rise at an 2.5% annual rate throughout the second half of 2013.

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