Wholesale Inventories Increase in November

Inventories at U.S. wholesalers rose 0.4% in November as companies accelerated their restocking efforts after hurricane-related supply disruptions, the Commerce Department said Tuesday.

Adding more goods to inventory helped boost the economy in the final three months of the year and will help fuel growth in coming months at the same time production increases, economists said.

The inventory-to-sales ratio, or the amount of time goods stayed on wholesalers’ shelves, increased slightly to 1.15 months in November from 1.14 the month before. October’s ratio matched a record low.

“With inventory-to-sales ratios at very low levels, we expect that inventory investment will pick up further in the months ahead,” said John Ryding, chief U.S. economist at brokerage Bear, Stearns & Co. in New York.

The November gain in wholesalers’ inventories followed a 0.2% rise in October.

Wholesale inventories of durable goods rose 0.6% in November reflecting increases of stocks of imported automobiles, machinery and lumber.

Wholesalers’ sales dropped 0.7% in the month, the most since April 2003, partly reflecting a drop in the value of petroleum products.

Wholesale inventories account for about one-fourth of all business stockpiles.

Separately, the International Council of Shopping Centers and UBS Securities said U.S. chain-store sales rose 3.7% in the week ended Jan. 7 compared with a year earlier as consumers began redeeming holiday gift cards.

About 40% of gift cards are redeemed in January, said Michael Niemira, the council’s chief economist.

Warm weather in much of the nation helped coax shoppers into stores, the council said. This month is on track to be the seventh-warmest January in 112 years, the group said, citing SDI-Weather Trends.