Wholesale inventories rose more than forecast in November as companies kept more goods on hand to meet improving demand, said a government report released yesterday.
The 1.1 percent rise, reflecting more metals, machinery and clothing, brought the value of stocks to $326.8 billion and matched the October increase, the Commerce Department said.
Economists had forecast a 0.7 percent rise in inventories, according to the median estimate in a Bloomberg News survey.
The Commerce Department also reported that the sales of wholesalers rose 0.7 percent in November after increasing 1.6 percent in October. Economists had forecast sales to increase by 0.8 percent.
Companies have been restocking to ensure enough goods are on hand after consumer spending grew at the fastest pace in almost three years during the third quarter. Inventory growth and rising demand are fueling orders, boosting production and helping underpin economic growth.
"Growth, particularly in consumer spending, has continued to surprise to the upside, so I think we may be back in a situation where inventory growth has been too small," said Stephen Stanley, chief economist at RBS Greenwich Capital in Greenwich, Conn. "I expect inventory growth to pick up in 2005."
Wholesalers had enough supply on hand to last 1.15 months at the current sales pace. The ratio has held there since May. In April, it was at a record-low 1.12 months. The ratio averaged 1.3 months in the record expansion from 1991 to 2001.
Inventories of durable goods at wholesalers rose 1.3 percent in November after rising 1.6 percent in October. Sales increased 0.9 percent in November after a 1.8 percent rise.
Stockpiles of imported automobiles and parts rose 0.5 percent. Metal inventories increased 3.9 percent, while stocks of machinery rose 1.4 percent. Computer equipment inventories rose 4 percent, while sales rose 4.7 percent.
Stocks of nondurable goods rose 0.9 percent after rising 0.3 percent in October. Apparel inventories rose 2.7 percent after a 2.4 percent rise. Sales of nondurable goods rose 0.4 percent.
Wholesalers account for about a fourth of all business inventories. Retailers and factories make up the rest.