US stockpiles likely showed a modest gain in February despite string of weak sales reports

Economic IndicatorsAssociated Press

The Commerce Department reports on February business stockpiles at 10 a.m. Eastern on Tuesday.

STOCKPILES UP: The expectation is that businesses boosted their stockpiles by 0.3 percent, according to a survey of economists by data firm FactSet.

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A SLOW START: In January, U.S. businesses did not add to their stockpiles for a second straight month as total business sales fell by the largest amount in nearly six years.

Economic growth has slowed over the past six months but economists are looking for a rebound in the April-June quarter, led by stronger consumer spending, which accounts for 70 percent of economic activity.

The expectation is that consumers will flock to auto dealerships and shopping malls now that a harsh winter is fading into the background, with pent up demand spurring sales.

Economists at JPMorgan are forecasting that the overall economy, as measured by the gross domestic product, will slow to a barely discernible growth rate of 0.6 percent in the first quarter this year, down from 2.2 percent growth in the fourth quarter. Both gains are far below the 5 percent growth rate seen in the third quarter last year.

However, many economists expect growth to rebound at a healthy rate of around 3 percent in the final three quarters of this year.

One risk to that forecast is sales of American exports. The sharp rise in the value of the dollar in recent months makes U.S. goods more expensive on overseas markets and this could cost U.S. companies sales.