Wholesale inventories in the U.S. increased by more than expected in the month of October, according to a report released by the Commerce Department on Tuesday, although the report also showed a notable drop by wholesale sales.
The report said wholesale inventories increased by 0.6 percent in October after rising by 1.1 percent in September. Economists had expected inventories to increase by about 0.4 percent.
The bigger than expected increase in inventories was largely due to a 1.0 percent increase in inventories of durable goods, which followed a matching increase in the previous month.
The Commerce Department said inventories of computer and computer peripheral equipment and software surged up 3.0 percent, while inventories of lumber and other construction materials jumped 1.8 percent.
On the other hand, inventories of non-durable goods edged down by 0.1 percent in October after soaring by 1.4 percent in September.
The modest drop in inventories of non-durable goods was due in large part to a 3.1 percent decrease in inventories of petroleum and petroleum products.
As mentioned above, the report also said wholesale sales fell by 1.2 percent in October after surging up by 1.9 percent in the previous month.
Sales of durable goods fell by 0.9 percent in October due in part to a 3.1 percent drop in sales of motor vehicle and motor vehicle parts and supplies.
The Commerce Department said sales of non-durable goods also fell by 1.4 percent amid a 5.7 percent decrease in sales of petroleum and petroleum products.
With inventories rising and sales falling, the wholesale inventories/sales ratio climbed to 1.22 in October from 1.20 in September. The ratio came in at 1.17 in October of 2011.
Compared to the same month a year ago, wholesale inventories were up by 6.6 percent in October, while wholesale sales were up by 2.3 percent.
by RTT Staff Writer
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