Wholesale inventories rise

NEW YORK (CNNMoney.com) -- Inventories and sales of U.S. wholesalers both rose during January, the Commerce Department said Monday.

Wholesale inventories grew 0.8% in January to a seasonally adjusted $414.82 billion, after a 1.1% increase in December.

Analysts polled by Dow Jones had expected to see a wholesale inventory increase of 0.5%.

"We're seeing a lot of price effects there," said Chris Lafakis, associate economist with Moody's Economy.com, referring to price increases due to rising commodity costs. "Businesses are still paring inventories, the economy is still contracting. We expect inventory accumulation to drag from low GDP growth."

Thanks to a large increase in the sale of farm products, total wholesaler sales grew by 2.7% to a seasonally adjusted $387.73 billion in January, after dropping by a revised 0.5% in December.

Farm product sales grew 16.1% in January while total sales of non-durable goods, such as paper products and pharmaceuticals, increased 3%. Non-durable goods inventories rose 1.2%, compared with a revised 1.8% growth in December.

Inventories of durable goods, such as automobiles and machinery, increased 0.6%, compared with December's revised 0.7% increase. Sales grew 2.4%, with metal products seeing a 4.2% increase. Sales of automotive products and furniture both grew more than 3%.

The ratio of wholesale goods on-hand to sales, which indicates the number of months sellers would need to deplete their current inventories, fell to 1.07, down from a revised 1.09 in December.