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US wholesale stockpiles rise in August by most in 4 months as sales fall sharply

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WASHINGTON — U.S. wholesale companies restocked their warehouses in August at the fastest pace since April, led by big increases in computers, lumber and furniture. But wholesale sales fell by the most since January.

The Commerce Department said Thursday that wholesale inventories rose 0.7 percent after a 0.3 percent increase in July. Sales fell 0.7 percent, the biggest decline since a 1.8 percent drop in January.

The figures indicate that inventories rose partly because sales slowed more than wholesalers anticipated. That suggests they may cut back their orders in the coming months. Slower restocking can slow factory production, which could weigh on the economy.

PHOTO: FILE - In this July 30, 2014 photo, David Mann, of Pawtucket, R.I., shops for vegetables at the Wishing Stone Farm stand at a farmers market, in Providence, R.I. The Commerce Department reports on wholesale stockpiles and sales in August on Thursday, Oct. 9, 2014. (AP Photo/Steven Senne, File)
FILE - In this July 30, 2014 photo, David Mann, of Pawtucket, R.I., shops for vegetables at the Wishing Stone Farm stand at a farmers market, in Providence, R.I. The Commerce Department reports on wholesale stockpiles and sales in August on Thursday, Oct. 9, 2014. (AP Photo/Steven Senne, File)

Computer sales fell 1.7 percent and lumber sales dropped 0.9 percent, the report showed. Wholesale auto sales also fell.

Stockpiles rose in many of the same categories: computer inventories jumped 4.5 percent, and lumber supplies rose 1.5 percent. Auto stockpiles rose 0.6 percent.

Inventory growth is viewed as a barometer of business sentiment. When companies add goods to their stockpiles, it typically reflects optimism about future demand. But it can also reflect an unexpected slowdown in sales that has left wholesalers with excess goods.

Inventory change can have a big impact on the economy. In the April-June quarter, faster inventory building by retailers, wholesalers, manufacturers and other businesses accounted for 1.4 percentage points of the 4.6 percent annual growth rate.

That followed a big cutback in restocking in the first three months of the year, which subtracted nearly 1.2 percentage points from growth. The economy contracted 2.1 percent in the January-March quarter, the worst showing since the recession ended in mid-2009.

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