Business inventories in the U.S. increased by much more than economists had expected in the month of January, the Commerce Department revealed in a report on Wednesday, although the report also showed a drop in business sales.
The report showed that business inventories rose by 1.0 percent in January following a revised 0.3 percent increase in December.
Economists had expected inventories to increase by 0.5 percent compared to the 0.1 percent growth originally reported for the previous month.
The bigger than expected increase was partly due to notably higher inventories at retailers and merchant wholesalers, which jumped by 1.5 percent and 1.2 percent, respectively. Inventories at manufacturers also rose by 0.5 percent.
On the other hand, the report also said that business sales fell by 0.3 percent in January after inching up by 0.1 percent in December.
Sales by merchant wholesalers fell by 0.8 percent, while sales by manufacturers edged down by 0.2 percent. Meanwhile, sales by retailers rose by 0.3 percent.
With inventories rising and sales falling, the business inventories/sales ratio rose to 1.29 in January from 1.28 in February. The ratio came in at 1.26 in January of 2012.
The report also showed that business inventories in January were up by 5.6 percent compared to the same month a year ago, while business sales were up by 2.9 percent year-over-year.
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