WASHINGTON (Reuters) - Wholesale inventories rose more than expected in January and sales set their fastest pace in 14 months, according to a government report on Wednesday that offered further signs of strengthening demand.
Total wholesale inventories increased 1.1 percent to $436.88 billion, the highest level since November 2008, the Commerce Department said, following an upwardly revised 1.3 percent rise in December.
Economists polled by Reuters had expected stocks of unsold goods at U.S. wholesalers to rise 0.8 percent in January after a previously reported 1.0 percent increase in December.
Sales at wholesalers jumped 3.4 percent to $386.97 billion in January, the highest level since July 2008, after rising by an upwardly revised 1.1 percent in December.
Analysts had expected sales at wholesalers to rise 0.5 percent in January after a previously reported 0.4 percent gain in December.
Inventory rebuilding slowed sharply in the fourth quarter of 2010 and was a drag on gross domestic product growth. Analysts expect businesses to step up the pace of inventory accumulation this quarter to meet strengthening demand.
The strong January sales pushed down the inventory-to-sales ratio, a measure of how long it would take to sell stocks at the current sales pace, to 1.13 months’ worth - the lowest level since April — from December’s 1.15 months, the Commerce Department said.
Reporting by Lucia Mutikani, Editing by Chizu Nomiyama