US wholesale inventories rose in February, but sales unexpectedly fell to post their largest decline in nearly two years, a government report showed on Friday. Total wholesale inventories increased 1.0 percent to $437.99 billion, the highest level since December 2008, the Commerce Department said, following an unrevised 1.0 percent rise in January.
Economists polled by Reuters had expected stocks of unsold goods at US wholesalers to rise 1.0 percent in February. Sales at wholesalers fell 0.8 percent, the largest drop since March 2009, after rising by a downwardly revised 3.3 percent in January. The decline in sales was the first since June 2009 and suggested that retailers were anticipating a slowdown in demand from consumers. Consumer spending got off to a slow start in the first two months of 2011 after a brisk pace in the fourth quarter, held back by bad weather and rising gasoline prices.
Sales at wholesalers in February were weak almost across the board, although groceries saw their biggest increase since January 1997. Petroleum sales fell 1.0 percent, but stocks rose 9.3 percent- the largest since June 2008. The weak sales pace raised the inventory-to-sales-ratio, which measures how long it would take to clear shelves at the current sales pace, to 1.16 months from 1.14 months in January.
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