WASHINGTON (AP) — U.S. wholesalers cut their restocking in February by the most in 17 months. But their sales jumped, suggesting companies underestimated consumer demand.
The Commerce Department says stockpiles at the wholesale level declined 0.3 percent in February from January, the biggest decline since September 2011.Farm products and gasoline led the drop. Agriculture stockpiles have fallen in recent months because of a drought in the Midwest.
Sales at the wholesale level rose 1.7 percent, the most since November. The increase was led by large gains in gasoline, clothes and computers.
Shrinking stockpiles weigh on economic growth because it means factories are producing fewer goods. But a jump in consumer spending in February suggests companies will have to build their stockpiles faster in the coming months, which should spur more growth.