WASHINGTON – Inventories at U.S. wholesalers fell in April, their first decline since August 2003, while sales at the wholesale level posted another healthy monthly gain, the government said in a report on Wednesday.
The Commerce Department (search) said wholesale inventories slipped 0.1 percent in April after a revised 0.5 percent gain in March. The fall in inventories took Wall Street by surprise. Analysts had expected April wholesale inventories to rise by 0.5 percent, according to a Reuters survey.
Sales grew at a slower pace than in previous months but were still robust, rising 0.8 percent after March's upwardly revised 2.9 percent increase.
March inventories had previously been reported as a 0.6 percent gain, while March wholesale sales had been initially reported as showing a 2.7 percent gain.
The advance in sales and the drop in inventories combined to push a key measure of inventory supply to a historic low. The inventory-to-sales ratio (search) — which measures how long it would take to draw down stocks at the current sales pace — fell to 1.12 months' supply from 1.13 in March. With consumer demand strong, the inventory figures may mean companies will ramp up production to boost their stocks of goods.
In April, inventories of durable goods — items meant to last three or more years — were flat, with declines seen in autos and hardware. Non-durable goods inventories fell by 0.2 percent, led by a sharp drop in drug stocks.
Earlier this month, Commerce said factory inventories grew by 0.4 percent in April. Retail sector inventories will be reported in the business inventories figures to be released June 15.