Your Economy (No Politics)

[Bullwinkle]

U.S. wholesale inventories rise 0.1% in January -
Friday, March 10, 2006 3:26:36 PM
http://www.afxpress.com


WASHINGTON (AFX) - U.S. wholesale inventories were as tight as ever in January, as sales growth of 1% outpaced inventory gains of 0.1%, the Commerce Department reported Friday

The inventory-to-sales ratio fell back to a record low 1.14. The typical wholesaler had less than 35 days of sales on hand. Tight inventories should lead to higher production later as wholesalers try to keep up with rising demand by increasing orders to producers and increasing imports, economists say

Economists polled by MarketWatch were expecting inventories to rise 0.6% in January. December figures were revised modestly. Sales were restated at up 1.2%, vs. 1% earlier. Inventories rose 0.9%, rather than the 1% initially estimated

Sales are up 5.7% over January 2005

The figures are seasonally adjusted, but are not adjusted for price changes

Financial markets rarely react to the wholesale trade data. They are chiefly of interest to economists, who use the inventories data to fill in gaps in their estimates of gross domestic product growth

In a separate report, the Labor Department said nonfarm payrolls increased by 243,000 in February, with the unemployment rate rising to 4.8%. Wholesalers are the middlemen between manufacturers and retailers, serving as a shock absorber for the business sector. Trends in the sector typically reflect conditions in the rest of the economy and are not considered leading indicators

Inventory growth in January was led by a 12.9% increase in petroleum stockpiles, which offset declines in most other nondurable categories. Nondurable inventories fell 0.1% in total

Drug inventories dropped a record 5.5% and are at a record low 0.89 inventory-to-sales ratio

Durable-goods inventories climbed 0.3%, despite a 1.2% drop in automotive inventories

Sales of durable goods increased 1.4% in January. Automotive sales rose 4.5%, the most in a year. Sales of lumber increased 4% and furniture sales climbed 2.2%, a reflection of the strong housing market. Sales of metals fell 2.3%

The inventory-to-sales ratio for durables fell to 1.43 from 1.44 in December

Sales of nondurable goods rose 0.6%, led by groceries, farm products and alcohol. Chemical sales fell 2%, petroleum sales dropped 1.1% The inventory-to-sales ratio for nondurables fell to 0.84 from 0.85

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