US wholesalers saw their sales rise well ahead of expectations in November while inventories fell for the first time in more than a year, a government report has shown.
The news is an unexpected boost to perceptions of the US recovery, offering a fresh sign of strengthening demand throughout the holiday shopping season.
The Commerce Department said wholesale inventories fell 0.2 per cent to a seasonally adjusted $425.5bn (£274bn) after an October increase that was revised downward slightly to 1.7 per cent.
Wholesale sales rose 1.9 per cent to a seasonally adjusted $370.1bn, well ahead of forecasts for a 1.5 per cent increase and the highest level since September 2008, when the financial crisis froze up credit markets.
October wholesale sales were revised upward to a 2.6 per cent gain.
The stronger than expected sales and the surprise dip in inventories implied that demand during the holiday shopping season may have been greater than retailers had anticipated.
Producers may need to boost output to keep inventories at desired levels at a time when demand is strengthening, which should help support future economic growth.
The inventory-to-sales ratio, which measures how long it would take to deplete stocks at the current sales pace, also fell in November to 1.15 months, from a downwardly revised 1.17 months in October.
The fall in inventories was led by a 0.9 per cent drop in stocks of non-durable goods, including drugs, groceries and farm products. Inventories of computer products fell 1.8 per cent.
Wholesale sales of computer products rose by 2.5 per cent, while sales of other electrical products were up 3.2 percent and hardware sales were up 5.5 per cent.
City A.M. Reporter