Wholesale Inventories Fall to 2-Year Low

U.S. wholesale inventories fell in December to the lowest level in two years, a sign that factories may have to increase production to meet future demand.

The 0.6% decrease in stockpiles to $288.2 billion followed a November decline of 1.3% that was larger than estimated, the Commerce Department said. Inventories have been falling since June, and the December level was the lowest since January 2000.

Wholesaler sales fell 0.4% in December after being unchanged in November. The inventory-to-sales ratio, a measure of the time goods sit unsold in wholesaler warehouses and lots, nonetheless fell in December to 1.29 months, the lowest since February 2001, from 1.3 months in November.

Compared with a year earlier, December inventories were down 5.3%, the largest decline in nine years of record keeping. Sales dropped 1% in all of 2001, also the biggest decline.