Inventories at U.S. wholesalers posted a larger-than-expected gain in November, a Commerce Department report showed on Thursday, suggesting businesses are becoming more optimistic about the economy's prospects.
Commerce said wholesale stocks of goods rose 0.5 percent, matching October's gain. The number was above Wall Street expectations for a smaller 0.3 percent increase. Wholesale sales were also up in November, but at a slower pace than the previous month. Sales gained 0.3 percent after a 2.0 percent surge in October.
Despite the hefty gain in inventories, the inventory-to-sales ratio, which measures how long it would take to deplete stocks at the current sales pace, held at a record low 1.18 for a second straight month. That indicates inventories are still very lean in comparison to sales, even as wholesalers have moved to ramp up their stocks on hand.
Firms can meet increased demand from wholesalers by ramping up production or, in some cases, by increasing imports of goods from abroad.
Farm product inventories, which surged 15.4 percent in October, shrank in November by 0.8 percent. The outsized gain in October helped account for a good portion of the month's overall rise in inventories.
Elsewhere in the Commerce report, auto inventories fell 0.5 percent in November, after October's revised 2.5 percent increase. The stock-to-sales ratio for the category moved down to 1.34 months from 1.37 months in October.
On Tuesday, Commerce reported inventories at factories dipped 0.2 percent in November. Data for retail inventories is to be released on Jan. 16.