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Wholesalers trim stockpiles in Nov.

Associated Press / January 12, 2011

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WASHINGTON — Wholesalers trimmed their stockpiles in November for the first time in nearly a year, probably reflecting their inability to keep up with strong sales gains.

The Commerce Department said wholesale inventories fell 0.2 percent. Sales rose 1.9 percent after a 2.6 percent surge in October — the largest monthly gain since March.

Private economists said the small drop in inventories was not worrisome because it probably reflected an inability of companies to keep up with unexpectedly strong sales.

“Businesses sold more than they had expected during the holidays and that left them with lower inventories. In the context of the strong sales gains, the small decline in inventories is a good thing,’’ said David Wyss, chief economist at Standard & Poor’s in New York. He predicted that inventories will rebound in early 2011.

Companies had increased inventories for 10 straight months before they declined in November to $425.5 billion. Even with the decline, wholesale stockpiles are 10.1 percent above the lowest point since the recession began.

Economists believe that businesses will keep boosting their stockpiles as long as sales continue to rise.

Retailers enjoyed the best holiday shopping season in four years and auto sales have been rising in recent months.