JOSH BOAK, AP Economics Writer
WASHINGTON (AP) — Cheaper oil and less demand for autos and machinery weighed on wholesalers in August, as their inventories edged up just slightly while sales dropped.
The Commerce Department said Friday that wholesale stockpiles rose 0.1 percent, and sales fell 1 percent. Sales have slid 4.7 percent over the past 12 months. Inventories have increased 4.1 percent.
Falling oil prices account for much of the declining sales.
Oil inventories — which are measured in dollars — plummeted 4.6 percent in August and 36.6 percent over the past 12 months. Sales of autos and machinery also slipped. But rising inventories for equipment, pharmaceuticals and chemicals suggest that wholesalers still see ongoing demand heading into end of the year.
Wholesale inventories are at a seasonally adjusted $583.9 billion, 4.1 percent above a year ago.
Sales weakened as the broader economy began to cool in August, hampered in large part by the risks of a worldwide deceleration in economic activity.
The slowing Chinese economy triggered alarms about corporate profits, resulting in a stock market sell-off. Canada has officially retreated into recession, and emerging economies such as Brazil have veered into a downturn. Growth in Europe continues to muddle along.
These problems seeped into the U.S. economy in the forms of a stronger dollar and lower energy prices. The rising value of the dollar caused American-made goods to become more expensive overseas, cutting into exports. Cheap oil and natural gas have led energy firms to cut back on their drilling activities and orders for pipeline and equipment.
More Americans are beginning to see the impact from these economic pressures.
Hiring has suddenly slowed. Employers added just 136,000 workers in August and 142,000 in September, well below the 3-month average of 324,333 at the end of 2014. Sales of existing homes have also fallen after strong gains earlier in the year.
The U.S. economy has recovered at a modest pace from the Great Recession during the past six years. Annual economic growth has averaged 2.3 percent in the first half of 2015, only slightly better than the pace during much of the recovery.
Forecasters at the private Macroeconomic Advisers say growth in the July-September quarter is tracking 1.4 percent.
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