WASHINGTON — U.S. wholesale businesses stepped up restocking in February, while more expensive gasoline drove sales higher.
The Commerce Department said Tuesday that stockpiles at the wholesale level rose a seasonally adjusted 0.9 percent in February to $478.9 billion. The government also revised January wholesale inventory growth to show a 0.6 percent increase, up from the initial reading of 0.4 percent.
Sales at the wholesale level rose 1.2 percent, largely on the strength of gas, hardware, plumbing and heating equipment. Sales were unchanged in January.
Faster inventory growth could lead economists to slightly alter their forecasts for broader economic growth in the January-March quarter.
Still, wholesale inventories are growing more slowly than they did at the end of last year, said Steven Wood, chief economist at Insight Economics. As a result, they will likely make a "modest negative contribution" to first-quarter growth.
Economists are forecasting first-quarter growth at an annual rate of roughly 2 percent, down from the 3 percent annual rate in the January-March quarter.
The Commerce Department issues its first estimate of January-March growth on April 27.
Businesses had slashed inventories over the summer out of fear that the economy was on the verge of another recession. When that didn't happen, many stepped up restocking at the end of last year.
Inventories at the wholesale level grew by 1.6 percent in the final three months of last year. All levels of business grew at an annual rate of 1.9 percent in the final three months of 2011. The rapid pace of restocking helped the economy to its best growth pace in a year and a half.
More robust hiring at the start of the year lifted consumer spending in February by the most in seven months. Consumer spending drives roughly 70 percent of economic activity. If consumers continue to accelerate their spending, businesses are likely to keep building their stockpiles.
Still, job growth slowed sharply in March. Employers added just 120,000 jobs last month — half the December-February pace. Economists blamed seasonal factors for much of last week's disappointing report from the Labor Department. They also noted that job figures can fluctuate from month to month and that consistently creating 200,000 jobs a month is tough.
Stockpiles at the wholesale level account for about 27 percent of total business inventories. Stockpiles held by retailers make up about one-third of the total and manufacturing inventories represent about 41 percent of the total.
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