Wholesale inventories up 0.3% in January, but sales fall 3.1%

http://www.reuters.com/article/2015/03/10/us-usa-economy-wholesale-idUSKBN0M61G120150310?feedType=RSS&feedName=businessNews

(Reuters) – U.S. wholesale inventories unexpectedly rose in January as sales recorded their biggest decline since 2009, pushing the number of months it would take to clear warehouses to its highest level in more than 5-1/2 years.

Newsletter

Zero spam.

Economic growth in recent months has been slowed by harsh winter weather as well as a now-settled labor dispute at West Coast ports and weak growth in China and Europe.

However, another report on Tuesday showed U.S. small business optimism edged up in February amid signs of tightening labor market conditions, suggesting wages may rise and bolstering the view that the recent slowdown in economic activity will be temporary.

3rd Party Advertisement

WHOLESALE SALES SLUMP

Sales at wholesalers fell 3.1 percent in January, the largest drop since March 2009, after slipping 0.9 percent in December, the U.S. Commerce Department said on Tuesday.

At January’s sales pace it would take 1.27 months to clear shelves, the most since July 2009, up from 1.22 months in December.

As a result wholesale inventories increased 0.3 percent in January, while stocks at wholesalers in December were revised to show them unchanged. Economists polled by Reuters had forecast wholesale inventories unchanged in January after December’s previously reported 0.1 percent gain.

Changes in inventories are a key component in the measurement of growth in gross domestic product. The high inventory-to-sales ratio suggests wholesalers have little incentive to stock their warehouses, which could weigh on first-quarter GDP growth.

The rise in wholesale inventories, weak January construction spending and export growth, and softer February automobile sales, have prompted economists to cut their estimates of U.S. first-quarter economic growth by as much as six-tenths of a percentage point to as low as a 1.5 percent annualized pace.

As of Monday this week, the Atlanta Federal Reserve’s model was forecasting a 1.2 percent growth pace for the January-March period. The economy expanded at a 2.2 percent rate in the fourth quarter last year, largely held back by a slow inventory build and a large international trade deficit.


Read Original Story...
HEADLINES
Canada, Mexico and Japan want to revive the Trans-Pacific Partnership free trade deal
Defense stocks at record highs after Trump signs $110 billion arms deal with Saudi Arabia
Trump’s proposal to sell oil reserve shows decline in reliance on imports, weaning off OPEC crude
Japan, Trans-Pacific Partnership members to pursue trade deal without the U.S.
OPEC seen extending output cuts as Saudi Arabia says most members on board
Oil prices rise as OPEC, other producers are expected to extend, deepen supply cuts
About Kelvin Ching

I'm a professional Forex trader and I have been trading for over 7 years. I was a series 3 broker and a registered CTA with the NFA, the main regulatory agency in the United States, and I have been involved at the highest levels in commodity trading. I also have a background in Information Technology, graphics design, and programming... I'm the co-founder of CurrencyNewsTrading.com, a site dedicated to fundamental analysis and news trading.

Speak Your Mind

*

Newsletter

Zero spam.