Washington, DC, May 9—Wholesale inventories increased 0.4% in March as wholesales grew by 0.2% during the month, according to the Commerce Department.
The inventory-to-sales ratio remained at 1.19. The typical wholesaler had about 36 days of sales on hand. A year ago, the inventory-sales ratio was 1.15.
Sales were up 7.2% year-over-year, while inventories increased 10.8%. The figures are adjusted for seasonal factors, but not for inflation.
All of the increase in sales was accounted for by petroleum, which increased 9.2% as prices soared. It was the largest increase in petroleum sales in two years.
Inventories were boosted by petroleum, up 9.3%, which offset a 2.3% drop in automotive inventories. It was the largest decline in auto inventories in three years.
Economists were looking for inventories to rise about 0.8% in March.
In February, wholesale sales fell a downwardly revised 0.5%, the largest decline in nearly two years. Inventories increased 0.6% in February, unrevised.
The wholesale data rarely move financial markets, primarily because the data are so outdated. The figures are of primary interest to economists filling in gaps in the data for their models of gross domestic product.
The shortfall in inventories compared with expectations could lead to a slightly lower estimate of gross domestic product. GDP increased 3.1% in the first quarter in the first estimate.
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.
In March, sales of durable goods fell 0.5% after a 1% drop in February. Sales of lumber sank 4.1%, while metals sales fell 1.2%. Auto sales dropped 0.9%. Inventories of durable goods increased 0.1%. The inventory-to-sales ratio for durables rose to 1.50. A year ago, the inventory-sale ratio was 1.41.
Inventories of metals increased 1.5%, leaving the inventory-to-sales ratio at a record high 1.92.
The increase in durables inventories could lead to production cutbacks if sales continue to weaken. Wholesale durable goods sales have fallen three months in a row.
Sales of nondurable goods increased 0.9% on the 9.2% jump in petroleum sales. Sales of most other nondurables fell; drugs fell 2.8%, chemicals dropped 1.5%, and paper fell 2.9%.
Inventories of nondurable goods increased 1% on the 9.3% rise in petroleum stocks and a 6.1% increase in farm products.
