U.S. wholesale businesses restocked at a slower pace at the start of the year, a trend that likely held back broader economic growth.
Stockpiles at the wholesale level grew just 0.4 percent in January. That's down from a vibrant 1.6 percent growth rate in the October-December. Sales dipped in 0.1 percent January, after having increased 1.7 percent in the fourth quarter.
Economists don't expect much pickup in wholesale inventory growth in February, although they forecast sales at the wholesale level rose 0.6 percent, according to a survey by Factset.
The Commerce Department will report on February inventories and sales at the wholesale level at 10 a.m. Eastern Tuesday.
Businesses haven't been restocking their shelves as fast as they did at the end of last year. Many had slashed inventories over the summer out of fear that the economy was on the verge of another recession. When that didn't happen, many stepped up restocking at the end of last year.
Inventories at all levels of business grew at an annual rate of 1.9 percent in the final three months of 2011. The rapid pace of restocking helped the economy expand at an annual rate of 3 percent in October-December quarter _ the best economic growth in a year and a half.
Even though businesses are still replenishing their shelves, the pace has ebbed from the end of last year. That has likely dragged on economic growth in the January-March quarter.
Economists expect first-quarter growth has slowed to roughly 2 percent. The Commerce Department issues its first estimate for January-March growth on April 27.
Robust hiring at the start of the year helped boost consumer spending in February by the most in seven months. That could help offset some of the weaknesses in inventory growth. Consumer spending drives roughly 70 percent of economic activity.
Still, job growth slowed sharply in March. Employers added just 120,000 jobs last month _ half the December-February pace. Economists, however, blamed seasonal factors for much of last week's disappointing report from the Labor Department. They also noted that job figures can fluctuate from month to month and that consistently creating 200,000 jobs a month is tough.
On Monday, Wall Street expressed its disappointment in the weaker jobs figures. The Dow Jones industrial average closed down130 points at 12,929, its first close below 13,000 since March 12.
Monday was the first day of trading since the government released the March jobs report. The stock market was closed for the Good Friday holiday.
Stockpiles at the wholesale level account for about 27 percent of total business inventories. Stockpiles held by retailers make up about one-third of the total and manufacturing inventories represent about 41 percent of the total.