US wholesalers boost stockpiles 0.6 pct in Jan., despite biggest sales drop since March 2009

WASHINGTON – U.S. wholesale businesses in January suffered their steepest sales drop in nearly five years, yet they continued to increase their stockpiles. This suggests that companies expect the economy to roar back after experiencing an abrupt winter slowdown.

The Commerce Department says wholesalers boosted stockpiles 0.6 per cent in January from December. Rising stockpiles boost economic growth because they reflect increased production at factories, a sign that wholesalers anticipate a stronger economy.

But sales tumbled 1.9 per cent in January. That’s the largest decline since March 2009, when the economy was in recession.

Heavy snowfall and bitter cold struck much of the United States in January, causing shoppers to stay at home and retail sales to fall 0.4 per cent that month.

Still, wholesale businesses have seen sales rise 3.9 per cent year-over-year.