Wholesale Sales Rebound to 0.7% Growth for February

Wholesale trade was up for February, according to a Commerce Department report (link opens a PDF) released today. 

After falling off 1.8% from December to January, wholesales sales advanced a seasonally adjusted 0.7% to $436 billion. 

While wholesale trade is used as an indicator of economic strength, investors pay close attention to durable goods as a potential sign of more sustainable confidence (or lack of confidence). For February, durable goods sales didn't live up to top-line numbers, edging up just 0.1% month-over-month. Lumber sales dropped off 2.9%, computer equipment fell 2.7%, and electrical durable goods dipped 1.6%. 

Nondurable goods sales helped keep February afloat, up 1.2% due primarily to a 4% spike in petroleum sales. 

Investors also keep a close eye on inventories. If factories are expanding their supplies, it could be a sign that wholesalers expect demand to pick up in the near future. For February, overall inventories expanded 0.5%, just below analysts' 0.6% expectations. This was the eighth consecutive month in which U.S. businesses increased their stockpiles. 

To understand the rate at which goods are being made and sold, economists compute an inventories/sales ratio. Since sales and inventories both increased by relatively similar dollar amounts, the inventories/sales ratio stayed steady at 1.19. 

Source: Census.gov. 

-- Material from The Associated Press was used in this report. link

The article Wholesale Sales Rebound to 0.7% Growth for February originally appeared on Fool.com.

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