Washington, DC, April 7--Wholesalers increased their inventories in February as sales declined at the fastest rate in nearly two years, the Commerce Department reported Thursday.
Inventories increased in value a seasonally adjusted 0.6% in February. Sales fell a seasonally adjusted 0.4%, the biggest drop since April 2003. The inventory-to-sales ratio rose to 1.18 from 1.17, indicating inventories still remain tight.
Economists surveyed by MarketWatch were expecting inventories to rise about 0.8% in February.
Inventories had increased 1% in January.
The wholesale data rarely move financial markets, primarily because the data are so outdated.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.
Wholesalers are 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.
Wholesale inventories are up 11.1% in the past 12 months. Wholesale sales are up 10.6%. The data are not adjusted for price changes.
In February, wholesale sales of durable goods fell 0.5%, including a 4.7% decline in electrical equipment sales, the biggest decline in nearly four years. Automotive sales increased 2.6%. Metals sales fell 1.4% after growing 31.6% in the past year.
Inventories of durable goods rose 1.2% in February. Automotive inventories fell 0.2%.
Sales of nondurable goods fell 0.2% in February, including a 1.1% drop in petroleum and 1.7% in farm products. Stockpiles of nondurable goods increased 0.5%. Petroleum inventories increased 2.9%. Farm product inventories rose 4.9%.
