Ahead of the Bell: Wholesale trade

AP News
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Posted: May 10, 2011 6:40 AM
Ahead of the Bell: Wholesale trade

Wholesale businesses likely added to their stockpiles in March for the 15th consecutive month and sold more goods after a setback in February. Growth in sales and inventories at the wholesale level should boost factory output in the coming months.

Economists forecast that sales at the wholesale level increased 1.1 percent in March while inventories rose 0.9 percent. The Commerce Department is scheduled to release the report at 10 a.m. Eastern on Tuesday.

The string of inventory gains pushed them to $438 billion, up 14.1 percent from the low reached in September 2009.

Sales at the wholesale level slipped 0.8 percent in February, the first setback since June 2010. The drop was likely temporary, given expectations for gains in consumer demand in coming months, supported by tax cuts and stronger employment growth.

The rising supplies and sales numbers are a sign of the manufacturing sector's health. The Institute for Supply Management, a private trade group, said last week that manufacturing activity grew for the 21st straight month in April, as the weak dollar and strong overseas demand for U.S. manufactured goods boosted exports.

Consumers are also buying more cars. Auto sales rose 18 percent in April compared to the same month a year earlier. Sales have reached an annual rate of 13 million for the last three months. That's much better than the 10.4 million autos sold in 2009, though below the 2005 peak of 17 million.