Wholesale Inventories Drop 0.2% in January

U.S. wholesale inventories unexpectedly fell in January after sales increased, keeping the amount of goods on hand at a record low, government figures showed Tuesday.

The 0.2% drop came after a 0.8% gain in December and a 0.3% rise in November, the Commerce Department said. Sales rose 1%, the most since November, reflecting more purchases of imported autos, higher-priced petroleum and lumber.

The inventory-to-sales ratio, a gauge of how long goods stay on shelves and in warehouses, fell to 1.21 months. That’s down from 1.28 months in January 2002 and matches November’s ratio, the lowest on record.

Smaller inventories may restrain the economy in the first quarter.

“Companies don’t want to be caught with merchandise that’s not rolling over,” said Richard DeKaser, chief economist at Cleveland-based National City Corp.

Inventory growth may slow this quarter as the prospect of war with Iraq prompts companies to delay spending plans.

The U.S. economy is expected to grow at a 2.2% annual rate in the current quarter and at a 2.8% pace in the following quarter, according to the latest Blue Chip Economic Indicators survey. Both forecasts are down 0.4 percentage point from projections made a month ago.

Stockpiles of durable goods at wholesalers, which include autos and metals, fell 0.4% in January after rising 0.2% the previous month, Tuesday’s report showed. Supplies of imported autos declined 0.8%. Furniture decreased 0.2%, machinery inventories dropped 1% and metals fell 1.6%.

Sales of durables rose 1% after falling 1% in December. Lumber sales jumped 7.4%. Sales of imported automobiles rose 0.6%. Computer equipment sales fell 2.5%, while inventories rose 1.3%.

Petroleum sales rose 7.6%, which may have reflected higher costs. The price of crude oil was $33.51 a barrel at the end of the month, up 7.4% from $31.20 a barrel at the end of December. Colder-than-average weather boosted demand for fuel, while the threat of war led to fears about supply disruptions and added to price increases.

Inventories of nondurable goods were unchanged. A decline in stockpiles of farm products restrained increases in petroleum and chemicals.