By fxtimes.com
Stockpiles held at US wholesalers rose unexpectedly in January, as sales recorded their biggest slump since 2009, pushing the inventory-to-sales ratio to its highest level in five-and-a-half years.
Wholesale inventories – a proxy for stockpile accumulation that is used in the calculation of gross domestic product – rose 0.3 percent in January following no change the previous month, the Commerce Department reported on Tuesday. Economists forecast no change for the month of January.
Compared to year-ago levels, inventories were up 6.2 percent.
Wholesale inventories excluding automobiles – the component used in the calculation of GDP – increased 0.2 percent from December, official data showed.
Wholesale sales declined 3.1 percent in January, the biggest drop since March 2009. Sales at wholesalers had slipped 0.9 percent in December.
Free Reports:
At January’s sales pace, it would take wholesalers 1.27 months to clear existing inventories, the most since July 2009, suggesting businesses have little incentive to restock their shelves at the start of the year.
Sales are expected to rebound in the spring to account for pent-up demand resulting from more plentiful jobs and rising consumer confidence. Employers added 295,000 payrolls in February, as the unemployment rate fell to 5.5 percent, a fresh six-and-a-half year low.
The US economy expanded just 2.2 percent annually in the fourth quarter, with business stockpiles adding just 0.1 percentage point to GDP growth. Economists are forecasting another downward revision to Q4 GDP after the Commerce Department said retail sales declined more than forecast in December.
The US economy is forecast to grow between 2.6 percent and 3 percent in 2015, according to the Federal Reserve. The Fed will release revised GDP estimates following next week’s policy meetings.
By fxtimes.com