Wholesale inventories rose more than expected in February and sales climbed to their highest level since October 2008, according to a government report on Friday that pointed to manufacturing strength.
Total wholesale inventories increased 0.6 percent, the Commerce Department said, from an upwardly revised 0.1 percent gain in January. Wholesale inventories in January were previously reported to have slipped 0.1 percent.
Economists polled by Reuters had expected stocks of unsold goods at U.S. wholesalers to rise 0.4 percent in February.
That's a good sign. They (wholesalers) are ordering more from manufacturers and that tells you the whole supply chain is going to help keep the economy growing, said Bernard Baumohl, chief global economist at the Economic Outlook Group in Princeton, New Jersey.
It just means the economy is running on more cylinders now, he said.
A sharp slowdown in the rate at which businesses depleted inventories contributed strongly to the economy's rebound from the worst downturn since the Great Depression of the 1930s.
The restocking exercise currently under way has boosted manufacturing, which is leading the economic recovery.
Sales at wholesalers increased 0.8 percent, the 11th straight increase, to $338.7 billion in February, the highest level since October 2008, after rising by a revised 0.9 percent the previous month, the Commerce Department said.
January's sales were previously reported as rising 1.2 percent from the prior month. Analysts had expected sales at wholesalers to rise 0.5 percent in February.
Despite the rise in sales, the inventory-to-sales ratio -- a measure of how long it would take to sell stocks at the current sales pace - was unchanged at 1.16 months' worth.
In February, durable goods inventories increased 0.5 percent, the largest gain since September 2008, while stocks of nondurable goods increased 0.8 percent.
(Reporting by Lucia Mutikani, Editing by Andrea Ricci)