Inventories held by businesses likely showed a fourth-consecutive monthly gain in April, which would be an encouraging sign for future economic growth.
Economists surveyed by Thomson Reuters expect inventories held on shelves and backlots grew by 0.5 percent in April following a 0.4 percent rise in March. The Commerce Department will release the inventory report at 10 a.m. EDT Friday.
Earlier this week, the government reported that inventories at the wholesale level increase 0.4 percent last month as wholesale sales rose by 0.7 percent.
The hope is that a steady rise in demand will prompt businesses to step up orders and restock depleted shelves. That would give a boost to factories and prompt them to increase hiring.
Inventories at the wholesale level had fallen for 13-consecutive months through September of last year. Businesses went through a massive liquidation of their stocks in a struggle to contain costs during the recession.
The move away from slashing inventories to restocking has played an important role in supporting growth in the past two quarters. A rise in factory orders has made the manufacturing sector one of the strongest contributors to the economic recovery.
The overall economy, as measured by the gross domestic product, grew at an annual rate of 5.6 percent in the final three months of last year, a surge powered by a swing in inventories.
Growth slowed to 3 percent in the first three months of this year with continued strength from inventories.
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