US wholesale trade falls 0.4 percent
US wholesale trade fell slightly in April, suggesting that the recession was abating but pushing total sales down to their lowest levels in 2-1/2 years.
April sales dropped a seasonally adjusted 0.4 percent from March, the Commerce Department reported Tuesday (.pdf). That was less than the 1 percent decline analysts had expected.
April's decline was the smallest since wholesale trade began its long fall in July 2008. (February 2009 was the exception, notching a slight upward blip.) Overall, wholesale trade stood at $309.4 billion for the month, its lowest level since November 2005. Sales of durable goods, led by a 7.8 percent drop in motor vehicles and parts, fell, while nondurable goods were up slightly, led by a 10.5 percent advance in farm product raw materials, such as grain and livestock.
For the eighth month in a row, wholesalers cut back their inventories – a key indicator of future growth. But because their sales have also been falling, their inventory-to-sales ratio remains far too high to rev up America's factories to produce more goods.
The April ratio stood at 1.31, not far from January's peak of 1.34 or the decade's record high of 1.35 set in June 2001.
