In U.S., supplies decline by 0.1%

Inventory dip was unexpected

Saturday, February 9, 2013

— Inventories at U.S. wholesalers unexpectedly fell in December for the first time in six months as companies tried to keep pace with cooling sales.

The 0.1 percent decrease in stockpiles followed a revised 0.4 percent rise in November that was smaller than originally reported, the Commerce Department said Friday in Washington. The median forecast in a Bloomberg survey called for a 0.4 percent gain. Sales were little changed after jumping 2.2 percent in November.

The drop in stockpiles at distributors means inventories will probably subtract even more from fourth quarter economic growth than currently estimated, partially offsetting a December plunge in the trade deficit that will improve the gross domestic product estimate. At the current pace of sales, wholesalers had enough goods on hand to last 1.19 months, the same as in November.

“We want to see inventories and sales rising at the same time,” said Guy LeBas, chief fixed-income strategist at Janney Montgomery Scott LLC in Philadelphia. “There will be a little bit of bounce” in stockpiles early this year.”

The median forecast for wholesale inventories was based on a Bloomberg survey of 26 economists. Estimates ranged from increases of 0.3 percent to 0.7 percent. The prior month’s figure was revised from a previously reported 0.6 percent gain.

Wholesalers’ stockpiles of durable goods, or those meant to last several years, increased 0.2 percent, Friday’s report showed. Gains for electrical equipment and hardware were almost completely offset by a 3.8 percent plunge for automobiles, the biggest since March 2009, and a 2.5 percent drop in furniture, the most since July 2009, Friday’s report showed.

The value of unsold nondurable goods fell 0.6 percent as pharmaceuticals and farm products declined.

Improving retail sales in January may mean wholesalers will need to restock warehouses at the start of 2013.

Last month, same-store sales for more than 20 companies tracked by Retail Metrics Inc. surged 4.5 percent from January 2012, the biggest year to-year gain since September 2011. Macy’s Inc., Gap Inc. and Target Corp. led U.S. retailers to the biggest monthly same store sales gain in more than a year as shoppers snapped up discounted merchandise.

“Our guests continue to shop with discipline in the face of a slow economic recovery and new pressures, including recent payroll tax increases,” said Gregg Steinhafel, Target chairman, president and chief executive officer in a statement.

Retail stockpiles will be included in the business inventories report due Wednesday.

Job gains are helping sustain consumer spending. Employers added 157,000 workers in January after a revised 196,000 gain in December and a 247,000 jump in November, the Labor Department reported last week.

Information for this article was contributed by Chris Middleton of Bloomberg News.

Business, Pages 27 on 02/09/2013