Wholesale Inventories Declined 0.7% in February

Inventories at U.S. wholesalers declined 0.7% in February, a bigger drop than expected and the ninth consecutive month companies have made some progress in reducing stockpiles, Bloomberg News reported.

Declining inventories can force businesses to order more products, which increases the demand for trucking services. Wholesalers account for about one-fourth of all business stockpiles.

The drop in inventories to $285.1 billion was more than expected, Bloomberg said, and followed a revised 0.5% decline in January. The level of inventories in February was the lowest since December 1999.

Total sales increased 0.8% for the month after rising 1.2% in January, the Commerce Department said. Sales of durable goods in February increased 0.8%, and sales of lumber, construction materials and motor vehicles also rose.

The inventory-to-sales ratio, a measure of how long goods remain on store shelves, fell to 1.26 months. That's the lowest since May 1997 and down from 1.27 months in January.

Analysts told Bloomberg the report suggests the inventory contribution to the economy in the fist quarter may be less than expected.

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