U.S. wholesale inventories rose more than expected in April, bolstering views of a sharp acceleration in economic growth in the second quarter.
The Commerce Department said on Tuesday wholesale inventories increased 1.1% after advancing by the same margin in March.
The rise outstripped economists' expectations for only a 0.5% gain.
Inventories are a key component of gross domestic product changes. The component that goes into the calculation of GDP - wholesale stocks excluding autos - increased 1.1%.
A sharp slowdown in the pace of restocking by businesses helped to sink economic growth in the first quarter, but a swing in inventories is expected in the April-June period.
Data last week showed a rise in stocks at manufacturers in April and further gains are likely after a surge in automobile sales in May depleted stocks of some vehicle models.
The economy contracted at a 1% annual pace in the January-March period as inventories subtracted 1.6 percentage points from GDP.
Growth this quarter is forecast topping a 3% pace, but the sturdy gains in wholesale inventories in April could prompt some economists to raise their GDP estimates.
Inventories in April were buoyed by a 2.8% jump in stocks of electrical goods, which was the largest increase since February 2004. Stocks of metals recorded their biggest gain since June 2011.
Sales at wholesalers increased 1.3% in April after rising 1.6% the prior month. They were driven by strong sales of autos, furniture, electrical goods and machinery.
