Wholesalers Cut Stockpiles to Lowest Level in 17 Months

whole inventories stockpiles february drop economy
Wilfredo Lee/APShipping containers are shown stacked at the Port of Miami in January. Data released Tuesday show U.S. wholesalers cut restocking in February to levels not seen in 17 months.
By CHRISTOPHER S. RUGABER

WASHINGTON -- U.S. wholesalers cut their restocking in February by the most in 17 months. But their sales jumped, suggesting companies underestimated consumer demand.

The Commerce Department said Tuesday that stockpiles at the wholesale level declined 0.3 percent in February. That followed a 0.8 percent increase in January, which was revised lower.

The decline was the first in eight months and the biggest since September 2011. Farm products and gasoline led the drop. Agriculture stockpiles have fallen in recent months because of a drought in the Midwest.

Sales at the wholesale level rose 1.7 percent, the most since November. The increase was led by large gains in gasoline, clothes and computers.

Shrinking stockpiles weigh on economic growth because it means factories are producing fewer goods. But a jump in consumer spending in February suggests companies will have to build their stockpiles faster in the coming months, which should spur more growth.


Sluggish growth in stockpiles was a key reason the economy barely grew in the October-December quarter. But economists are looking for a significant rebound in business restocking this year, helped by a resilient consumer that has continued to spend despite paying higher taxes.

Most economists expect growth accelerated in the January-March quarter to an annual rate of more than 3 percent. That would be a vast improvement over the 0.4 percent growth in the final three months of 2012.

In January, Social Security taxes rose on nearly all Americans who draw a paycheck. The increase leaves a person earning $50,000 with about $1,000 less to spend in 2013. A household with two high-paid workers will have up to $4,500 less.

But Americans spent more in January and February. Many analysts now expect consumer spending rose by about 3 percent at an annual rate in the first quarter. That would be much faster than the fourth quarter's 1.8 percent pace.

The jump in spending will likely force many companies to order more goods to restock their shelves.

Learn about investing from the comfort of your own home.

Portfolio Basics

Take the first steps to building your portfolio.

View Course »

Investment Strategies

Learn the strategies you need to build a winning portfolio

View Course »

Add a Comment

*0 / 3000 Character Maximum

21 Comments

Filter by:
teaparty.usa.usa

tea party is made up of american vets that served our country from california to new york that obamy don't care about n would rather see dead before giving any of them housing ,come out americans n join our movement for a better n stronger america for americans . !

April 10 2013 at 2:03 AM Report abuse rate up rate down Reply
1 reply to teaparty.usa.usa's comment
elendil3136

Let me know what you are smoking, so that I don't accidentally get any of it.

April 10 2013 at 2:40 AM Report abuse rate up rate down Reply
jasherrin

They should put Bush in chains and charge him with war crimes ,this country or its politicians are too freekin arrogant and do NOT do as there told by the people who elected them .Take immigration.we the people want (the the majority) want the borders closed and illegals sent home .What do the ?politicians do meet with labor and business and let them write up the paper work for the new legislation! he started all this cause his daddy had a war and he had to have one too !Saddam had no WMD's and the way they executed him was just horrendous .Again we were lied to by the The most powerful man on the planet ?

April 09 2013 at 10:08 PM Report abuse rate up rate down Reply
jasherrin

Who wrote that piece of Crap?Lies lies lies .Japan is in a 20 year recession and now they are trying something else to spur their economy.20 years isnt a slump !At some point these journalists will put 2&2 togeather and get :there are way too many people on this planet using up our resources,and our economies can only grow as long as we have unlimited access to way more resourses than any of us on this planet has.How long can the type of growth wall street and that ilk want if we are running out?Just accept the facts and grow at the modest growth we can expect for the future unless we find a planet of uranium or oil>Thank!

April 09 2013 at 9:53 PM Report abuse -2 rate up rate down Reply
Tanya and Brad

typical of what you see unemployment is falt at 8 % Obama and his conpatriots have done nothing about it and won't it will be more and more common to see things like this as we venture over to the Socialist Utopia the Democrats want for us

April 09 2013 at 9:15 PM Report abuse rate up rate down Reply
apartyof.omg.nojobs

CUT THE SIZE OF GOVERNMENT~~CUT THE MUSLIM CLOWNS "OUT OF CONTROL SPENDING"~~CUT THE TAXES ~~THE MUSLIM CLOWN STOLE YOUR HOUSES N NOE WANTS TO ROB YOUR SOCIAL SECURITY~~ARE YOU PEOPLE JUST GOING TO SIT THERE N LET HIM GET AWAY WITH THAT ? ? ? ?

April 09 2013 at 8:34 PM Report abuse rate up rate down Reply
1 reply to apartyof.omg.nojobs's comment
elendil3136

I take it that you were asleep in government class when the teacher explained that only CONGRESS can spend money.
You TEA Party loons need to go back to the 10th grade. Wait - did you ever get to the 10th grade?

April 10 2013 at 2:51 AM Report abuse -1 rate up rate down Reply
jalanandmruth

sales going up stock market going up unemployment coming down. Still not as fast as we would like to see it of course, but moving in the right direction. Bagger heads exploding everywhere

April 09 2013 at 8:06 PM Report abuse -1 rate up rate down Reply
Iselin007

Yoy don't hear the visa workers complaining about high unemployment because they got your jobs!

April 09 2013 at 4:04 PM Report abuse rate up rate down Reply
Iselin007

Don't worry soon there will be a major War and more spending on everything but creating jobs.

April 09 2013 at 4:00 PM Report abuse -1 rate up rate down Reply
Iselin007

They gave our careers away so the older generations could break their backs working in the big box stores

April 09 2013 at 3:57 PM Report abuse +1 rate up rate down Reply
janeswizzle

Soon food stamps will be worthless like our devalued dollar. Got MRE's ?

April 09 2013 at 2:04 PM Report abuse -1 rate up rate down Reply