Wholesale inventories jump 1.2%

Inventories at U.S. wholesalers jumped in January by the most in more than a year as companies shrugged off concerns about fiscal policy and ramped up in anticipation of rising consumer demand.

The 1.2 percent increase in stockpiles exceeded all estimates in a Bloomberg survey of economists and was the biggest since December 2011, the Commerce Department said Friday. Sales fell, reflecting a slump in nondurable goods, including petroleum and farm products.

Distributors are restocking warehouses after consumer spending picked up at the end of 2012 as the Christmas season drew shoppers and auto sales rebounded. Combined with another report Friday showing employment accelerated in February, the figures indicate the world’s largest economy is strengthening in early 2013.

“The economy looks like it’s on better footing,” said Sean Incremona, a senior economist with 4Cast Inc. in New York.

Payrolls increased more than forecast in February and the unemployment rate unexpectedly fell to a four-year low of 7.7 percent, a sign employers were undaunted by the budget impasse in Washington, the Labor Department said.

The median forecast in a Bloomberg survey of 27 economists called for a 0.3 percent gain in inventories. Estimates ranged from increases of 0.1percent to 0.9 percent. The prior month’s figure was revised to a 0.1 percent gain from a previously reported 0.1 percent decline.

At the current pace of sales, wholesalers had enough goods on hand to last 1.21 months, up from 1.19 months in December, the report showed.

Wholesalers’ stockpiles of durable goods, or those meant to last several years, increased 1.1 percent, aided by machinery and computers.

The value of unsold nondurable goods climbed 1.2 percent as sales dropped 2.1 percent.

Wholesalers, which make up about 30 percent of all business stockpiles, might be feeling the effects of improved consumer confidence as Americans looked beyond budget rancor in Congress and continued to spend.

Steinway Musical Instruments Inc. is increasing production with new hires, increased capital spending and added inventories. The manufacturer of pianos and band instruments, based in Waltham, Mass., has been able to raise prices as consumer demand strengthens.

“We’ve been in an under inventoried position and the fact that inventory dropped is not necessarily where we want to be,” Chief Executive Officer Mike T. Sweeney said on a March 6 earnings call. “We expect 2013 to be a good year overall and have ramped up production accordingly.” Information for this article was contributed by Chris Middleton of Bloomberg News.