Inventories at Wholesale Level Rise in April

Stocks of unsold wholesale goods grew for a 10th straight month in April, outpacing a weaker rise in sales, the Commerce Department said Tuesday.

Wholesale inventories grew 1.2% to a seasonally adjusted $246.4 billion in April after a revised 1.3% increase in March.

Inventories were higher for both durable goods--items that are expected to last at least three years, such as cars and computers--and non-durable goods, such as apparel and paper products.

The report is consistent with other recent signs that the economy is entering a slowdown as consumers retrench after the fast-paced spending and growth of 1994.

Sales by wholesalers rose 0.5% in April to a seasonally adjusted $184.1 billion, after a 1.0% fall in March. Before that, the last time sales fell was in September, when they dropped 0.6%.

There was a slightly stronger buildup in April inventories of durable goods, which rose 1.3%, over non-durable goods, which increased 1.1%.

The higher inventory of durable items was led by a 2.5% gain in motor vehicles and parts. Inventories were up in every category except lumber and construction materials, hardware, plumbing and heating equipment.

Inventories of non-durable goods were boosted by apparel, piece goods and notions and in petroleum and petroleum products.

But the increase was offset by a big drop in stocks of farm product raw materials, and a much smaller drop in stocks of beer, wine and distilled beverages.

The inventory-to-sales ratio, which measures how long it would take to sell off inventories at the current sales pace, rose to 1.34 months in April. Department officials said that is the highest ratio since a matching rate in December, 1991, further suggesting that sales are not strong enough to absorb production at the current pace.

Last month, the inventory-to-sales ratio rose to 1.33 months, the highest since December, 1993, when it was also 1.33.