Inventories increase by 1 percent, beating forecasts
Wednesday, March 13, 2013 12:49 PM
Inventories in the U.S. rose in January by the most since May 2011 as companies
replenished warehouses and shelves amid signs demand will pick up, Bloomberg
The 1 percent increase in goods on hand exceeded the highest forecast in a
Bloomberg survey and followed a 0.3 percent gain in December that was more than
previously estimated, according to a Commerce Department report released this
morning. The median estimate was for a 0.5 percent advance.
The uptick in inventories indicates businesses are restocking after a cutback
in the pace of inventory building in the fourth quarter that weighed on
economic growth. Progress in the labor market is sustaining consumer spending
as companies invest in new equipment, a sign factory orders may pick up.
"As evidence grew that consumer demand had momentum, businesses had to
catch up again" after the slowdown in inventory growth at the end of 2013,
Sam Coffin, an economist for UBS Securities LLC in Stamford, Conn., said prior
to the report's release. "Household spending has been moving along at a
In a separate report, the Commerce Department announced that sales at U.S.
retailers rose by 1.1 percent in February, the biggest increase in five months.
That increase also exceeded projections by economists and followed a 0.2
percent gain in January. The median forecast was for a 0.5 percent increase, Bloomberg
Eight of 13 major categories showed increases, led by a 5 percent increase in
receipts at gasoline stations that reflected higher fuel costs. Sales were also
up at building materials outlets, auto dealers and general merchandise stores.