Wholesale inventories fall while sales increase

WASHINGTON (AP) — Businesses trimmed inventories at the wholesale level again in January even though sales rose for a 10th consecutive month. The dip in inventories underscored that businesses remain cautious about restocking their depleted shelves.

The Commerce Department said today that inventories at the wholesale level were reduced 0.2 percent in January after a 1 percent drop in December. Sales were up a solid 1.3 percent, the best showing since a 3.6 percent rise in November.

Economists are hoping that the steady gains in sales will soon prompt a sustained rebound in inventory restocking. That would trigger increased factory production and provide support for the fledgling recovery.

Analysts believe the stage has been set for such a rebound given how lean inventories are at present following a massive inventory liquidation that occurred during the recession.