WASHINGTON – Businesses at the wholesale level added to their stockpiles in January and their sales jumped by the largest amount in 14 months. But the spike in sales was partially influenced by rising oil prices.
Wholesale inventories rose 1.1 percent in January, the Commerce Department said Wednesday. It was the 12th gain in 13 months.
Sales at the wholesale level rose for the seventh straight month. The 3.4 percent increase was the largest gain since November 2009.
Still, a 10.6 percent rise in demand for petroleum helped drive the jump in sales, reflecting higher oil and gas prices.
The rise in inventories left stockpiles at $436.9 billion. That's 13.1 percent higher than the low reached in September 2009, when companies were slashing their stockpiles to keep costs under control during the recession.
Greater sales should encourage businesses to keep restocking their shelves and drive factory production in the months ahead.
Economists are concerned that rising oil prices could pose a risk to the economy. David Wyss, chief economist at Standard & Poor's in New York, said that oil prices will have a limited effect on economic growth. He said the broad gain in sales and inventories in January suggest the economy could withstand that impact.
"There was strength almost across the board," Wyss said. "This shows that businesses were busy restocking their shelves after a stronger-than-expected Christmas and that is good news for the economy."
Mike England, senior economist at Action Economics, said another positive sign was the revised inventory growth in December, a stronger 1.3 percent increase. That's up from 1 percent originally reported.
England said that should translate into a modest upward revision in overall economic growth for the October-December quarter. The government's latest estimate for growth in that quarter was 2.8 percent.
The restocking of warehouses has helped to boost production and job growth at U.S. factories. Economists believe that trend will continue in 2011.
Manufacturers have benefited from rising demand for products in the United States and overseas. The falling dollar against many major currencies has also driven export demand. A weaker dollar makes U.S. goods cheaper on foreign markets.
The January sales increase included a 7.8 percent surge in demand for autos.
The rise in inventories also reflected strength in autos. Those inventories increased 2.1 percent.
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