Wholesale inventories, sales rise

The government reported this morning that wholesale inventories increased by a solid 1.0% in December amid growth in both durable and non-durables inventories.  Non-durables, which include farm products, appears to have been less affected last month by commodity inflation.

In the meantime, sales grew by a modest 0.4% following a large 1.9% rise in November. That took the inventories-to-sales ratio – how many months it would take to liquidate all goods on hand – to a still healthy 1.16 in December from 1.15 in November.



The rise in stockpiles on hand is probably the result of expectations of further gains in demand.  But current inventories remain well under control, so additional increases in demand are likely to fuel production and lend support to economic activity.