WASHINGTON (AP) -- Businesses likely slowed their restocking of store shelves this year following a big jump in inventory building at the end of last year.
The Commerce Department will report on inventories for April on Friday at 10 a.m. Eastern time. Many economists were looking for another modest gain with analysts forecasting that sales at the wholesale level rose 0.4 percent, according to a survey by FactSet.
Businesses order more goods when they increase their stockpiles. That typically leads to more factory production and economic growth.
It would have taken roughly five weeks to exhaust all wholesale stockpiles at the March sales pace. That's considered a healthy time frame and suggests businesses will keep restocking to meet demand.
Inventories are expected to keep growing this year, though probably nowhere near the level seen at the end of last year.
Many businesses cut back on restocking last summer fearing that the economy was on the verge of another recession. When it became clear that it wasn't, they raced to rebuild stockpiles and keep pace with consumer demand.
In the first three months of this year, the economy grew at an annual rate of 1.9 percent. That gain was driven by the fastest growth in consumer spending since late 2010.
Consumers spent more partly in response to strong hiring. But hiring has slowed sharply over the past two months. In May, employers add just 69,000 jobs, the smallest increase in a year, and the unemployment rate edged up form 8.1 percent in April to 8.2 percent in March.
And wages have continued to lag as well. Sluggish job growth and weak pay raises threaten to drag on consumer spending. That would weaken growth. Consumer spending accounts for 70 percent of economic activity.
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. Manufacturing inventories represent about 40 percent of the total.
Irving Oil requests hike in wholesale gas margins - CBC
Irving Oil Ltd. is seeking an increase in wholesale margins from the Energy and Utilities Board. (CBC)Irving Oil Ltd. is seeking approval from the Energy and Utilities Board to increase wholesale margins on gasoline and home heating fuel, a move that would lead to higher costs for consumers.
The province’s regulated gas prices allows for a six-cent margin for wholesalers, a fee that has not been increased since the system was put in place in 2006.
In documents filed with the Energy and Utilities Board, Irving Oil says those margins must be increased or it could threaten the financial viability of wholesale companies in the province.
“It is important for the actual wholesale costs to be recovered in the wholesale margins because without cost recovery it will not make economic sense to continue to supply retailers where the wholesale cost increases exceed what can be recovered from retailers,” stated Matthew Holland, the petroleum manager of Irving Oil Marketing G.P. in a document filed with the regulator.
“As the costs need to be ultimately recovered, it is necessary to provide for a reasonable opportunity of cost recovery to maintain a competitive marketplace. “
There are 59 wholesalers registered in New Brunswick.
Irving Oil would like to see the wholesale margin for gasoline to rise to 7.36 cents per litre from six cents per litre.
Further, the company would like to see the wholesale margin for heating oil to rise to 6.28 cents per litre from five cents per litre.
Irving Oil has requested the financial documents that it is using to justify its request to be kept confidential.
“Public disclosure of the confidential information will harm Irving Oil by providing its competitors, suppliers, retailers and other counterparties with access to commercially and financially sensitive, information with respect to a critical component of its operations,” said Len Hoyt, a lawyer for Irving Oil in a statement to the board.
Retail margins increased in 2011
When the Energy and Utilities Board sets its weekly price, a certain portion is set aside for the cost of fuel, plus wholesale and retail margins. And a maximum of 2.5 cents per litre can be added for a delivery charge.
While Irving Oil is seeking an increase to its wholesale margins, retailers have already benefited from an increase in their margins. In June 2011, the board approved the maximum retail margin for gasoline to increase to 5.9 cents per litre up from five cents per litre.
Irving Oil said much has changed in the oil and gas industry since the regulated gas system came into place in 2006.
“Since the time when the wholesale margins were established, there have been substantial increases in wholesale costs,” Holland said.
“Wholesalers cannot and should not continue to have their unit margin eroded without the ability to recover their lost revenue in a timely manner,” Holland added in his statement.
US wholesale stockpiles grew 0.6 percent in April - Denver Post
The Commerce Department says stockpiles grew 0.6 percent at the wholesale level in April, double the March gain. Sales by wholesale businesses jumped 1.1 percent in April, nearly three times the March sales gain.
Stockpiles at the wholesale level stood at $483.5 billion in April. That's 25.6 percent above the post-recession low of $384.9 billion in September 2009.
It would take roughly five weeks to exhaust all wholesale stockpiles at the April sales pace. That's considered a healthy time frame and suggests businesses will keep restocking to meet demand.
When businesses step up restocking, they order more goods. That generally leads to increased factory production and higher economic growth.
Slower growth in inventories held back growth in the January-March quarter. In the first three months of this year, the economy grew at an annual rate of 1.9 percent.
The increase in wholesale inventories was bigger than economists had forecast. That could signal that inventory growth will pick up and boost economic growth in the April-June quarter.
But stockpile growth largely depends on the spending habits of U.S. consumers and businesses.
Weaker job creation in April and May could force some to scale back spending. And pay has risen just 1.7 percent over the past 12 months. That's slower than the rate of inflation for that period.
Sluggish job growth and weak pay raises threaten to drag on consumer spending, which would weaken growth. Consumer spending accounts for 70 percent of economic activity.
One positive change: Gas prices have tumbled since early April. That could give Americans more money to spend on appliances, vacations and other discretionary purchases.
Many businesses cut back on restocking last summer fearing that the economy was on the verge of another recession. When it became clear that it wasn't, they raced to rebuild stockpiles and keep pace with consumer demand.
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. Manufacturing inventories represent about 40 percent of the total.
US Wholesale Inventories Rise 0.6% In April - NASDAQ
WASHINGTON--Inventories at U.S. wholesalers increased in April as stockpiles of cars, machinery and other long-lasting goods grew.
The inventories of U.S. wholesalers increased by 0.6% from the prior month to a seasonally adjusted $483.50 billion, the Commerce Department said Friday. Economists surveyed by Dow Jones Newswires had forecast a 0.5% gain.
Sales for wholesalers were up 1.1% in April to $415.02 billion.
Wholesalers must stock the pipeline to keep up with end demand. Despite weak job creation and worries about Europe, personal spending has been a bright spot for the U.S. economy so far this year.
The government's gross domestic product report last week showed consumer spending rose 2.7% during the January-to- March period, the best quarterly gain since 2010. Separate data showed personal spending increased 0.3% in April from the prior month.
But the economy as a whole slowed to a 1.9% growth rate in the first quarter, from a 3.0% annualized gain in the final quarter of 2011, partially because the pace of inventory increases slowed.
According to Friday's report, restocking of automobiles, up 1.7%, and machinery, up 2.4%, helped drive the overall inventory gains in April.
Wholesalers' inventories of all durable goods increased by 1.1%, the strongest gain since May 2011.
Meanwhile, non-durable goods inventories moved down 0.1% in April. Declining stockpiles of drugs and groceries helped off set a 2.0% rise in petroleum inventories.
The amount of wholesale goods on hand relative to sales in April was 1.17, the same as the prior month. The inventory- to-sales ratio measures how many months it would take for a firm to deplete its current inventory.
In March, overall wholesale inventories increased 0.3%, as previously reported. However, sales growth was revised down to 0.4% from 0.5%.
The Commerce Department data are available online at: http://www2.census.gov/wholesale/pdf/mwts/currentwhl.pdf.
(END) Dow Jones Newswires 06-08-121035ET Copyright (c) 2012 Dow Jones & Company, Inc.
Stocks climb: Dow closes up 0.75% on wholesale report - USA Today
It was a relief for investors after the big drops of the previous week.
The Dow finished 93.24 points higher, or three-quarters of a percent, at 12,554.20. It ended the week up almost 3.6%.
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The Standard & Poor's 500 index rose 10.67 points, or 0.81%, to close at 1,325.66. The Nasdaq composite rose 27.40 points, or 0.97%, to close at 2,858.42.
Stocks fell in morning trading, with the Dow Jones industrial average down almost 63 points. But they turned around after the government said that wholesale businesses restocked faster than analysts had expected.
The Commerce Department said U.S. wholesale stockpiles grew 0.6% in April. That's twice as fast as they grew in March and a sign that businesses are ordering enough goods to lead to increased factory production and sales. Investors had been braced for more sluggish growth.
Oil fell 72 cents to $84.10 per barrel. Sure, it was pushed down by long-term economic worries. But lower energy costs help consumers.
"If you had some doubts about an economic recovery, oil in the $80s is a lot better than oil at $110," said Jim Dunigan, managing executive of investments for PNC Wealth Management in Philadelphia. Oil traded just below $110 in late February.
Nine out of the ten industry groups in the S&P 500 rose. Only energy stocks declined, following energy prices lower.
Wal-Mart Stores (WMT) was the biggest gainer in the Dow, up $2.35, or 3.6%, at $68.22. Other companies that depend heavily on a strong economy grew too, including Intel (INTC), up 47 cents, or 1.8%, at $26.41, and General Electric (GE), up 20 cents, or 1%, to $19.20. Home Depot (HD) rose $1.11, or 2.2%, to $52.35.
Facebook (FB) rose 79 cents, or 3%, to $27.10 after announcing an "app center" that will recommend new add-on software for users. Anything that boosts user interaction is likely to help it sell more ads, which has been a key concern for investors in its new stock, which debuted three weeks ago at $38.
Chesapeake Energy (CHK) shareholders punished their directors and were rewarded by the market. The stock rose 51 cents, or 2.9%, to $18.36 after shareholder votes prompted the resignations of two directors at the company's annual meeting Friday. Earlier in the day the company said it will sell pipeline assets in three deals for a total of more than $4 billion in cash.
Navistar International (NAV) rose $4.25, or 17.6%, to $28.36 after the activist investor Carl Icahn boosted his stake in the truck maker.
Markets fell in Asia. Shanghai's stock index lost a half-percent, its fifth day of losses. Japan's Nikkei fell 2.1%.
Chinese leaders have been showing signs of urgency ahead of May trade and industrial data due out this weekend that might be even weaker than earlier pessimistic forecasts. The Chinese government cut interest rates for the first time in four years and has reduced gasoline and diesel prices for the second time in a month.
Over the long run, that will put more money in the pockets of Chinese consumers. In the short run it's a sign that the government is worried about growth.
"That shows they're being proactive, but on the other hand, it also makes you wonder, what's the data is really like?" said Uri Landesman, president of Platinum Partners. "I'm wondering how bad the data's going to be. I'd be very surprised if it's good."
China is a key U.S. trade partner so its growth is important to U.S. companies. Its importance is magnified by the possibility that Europe's economy will go from slow growth to shrinkage, Landesman said.
Major European markets fell, although their declines were smaller after the U.S. inventory news came out. France's benchmark index lost 0.6%, Britain's and Germany's each dropped 0.2%.
Those losses came a day after Federal Reserve Chairman Ben Bernanke indicated there were no immediate plans to boost growth in the world's largest economy, wiping out gains made on China's surprise interest rate cut.
U.S. Wholesale Inventories Rise More Than Expected In April - RTT News
6/8/2012 10:18 AM ET
(RTTNews) - U.S. wholesale inventories increased by more than expected in April even as wholesale sales increased, according to figures released Friday by the Commerce Department.
Total inventories of merchant wholesalers were recorded at a seasonally adjusted level of $483.5 billion at the end of April, a 0.6 percent increase from revised March levels, which were also up slightly from initial reports.
Economists had expected wholesale inventories to increase by about 0.5 percent.
On a year-over-year basis, U.S. wholesale inventories were up 8.2 percent from April 2011 levels.
April also saw an increase in sales at the wholesale level, with the Commerce Department figures showing a 1.1 percent increase to a seasonally adjusted level of $415 billion, up 6.8 percent from April 2011 levels.
Despite the larger increase in sales than in inventories, the inventories-to-sales ratio held steady at 1.17 in April.
The increase in wholesale inventories was driven by a 1.1 percent increase in inventories durable goods, which more than offset a 0.1 percent decline in inventories of non-durable goods. The April increase in durable goods inventories is the strongest since May 2011.
Automotive wholesalers recorded a 1.7 percent increase in inventories, while professional equipment inventories rose 1.4 percent, paper inventories jumped 3.9 percent, machinery inventories climbed 2.4 percent and petroleum inventories advanced 2 percent.
Inventories of groceries, drugs and furniture posted declines in April.
On the sales side, sales of wholesale durable goods were up 0.1 percent, while sales of non-durable goods rose 1.9 percent.
Automotive sales recorded a 3.8 percent increase, while wholesale petroleum sales jumped 4.8 percent, the largest increase since April 2011.
Wholesale sales of furniture, metals, machinery, paper goods and groceries all fell notably for the month.
by RTT Staff Writer
For comments and feedback: editorial@rttnews.com
Wholesale Inventories Rise, Markets Advance - Arlington Heights Daily Herald
A 0.6% increase in wholesale inventories lifted the markets higher during the midday with the Dow rising 24 points to 12,485. Nasdaq gained 11 points to 2842.
On the upside
Billionaire investor Carl Icahn acquired additional shares of Navistar International (NYSE: NAV) to increase his stake to 11.87%.
Cantor Fitzgerald initiated coverage of Neonode (Nasdaq: NEON) with a Buy rating.
Shares of Zalicus (Nasdaq: ZLCS) continued climbing after a Seeking Alpha contributor wrote yesterday that the company was one of five biotechnology stocks poised for growth.
On the downside
TheStreet Ratings affirmed its Hold rating on US Steel (NYSE: X).
TheStreet Ratings reiterated its Hold with a ratings score of C on Exelon (NYSE: EXC).
Shares of Quicksilver Resources (NYSE: KWK) continued falling after TheStreet Ratings downgraded the company to a Sell rating yesterday.
In the broad market, advancing issues outpaced decliners by a margin of nearly 5 to 4 on the NYSE and by nearly 7 to 5 on Nasdaq. The Russell 2000 which tracks small cap stocks rose 3 points to 763.
West Cumbria shopping arcade all set for go-ahead - News and Star
Last updated at 15:26, Friday, 08 June 2012
Plans for a shopping arcade which would create 30 jobs in Cockermouth town centre look set to be approved next week.
Cockermouth town council snubbed plans to build the arcade of shops, offices and a cafe in Station Street when they met last week.
But Allerdale Council’s development panel members are being recommended to approve the proposal, by Mitchells, when they meet on Tuesday.
Mitchells wants to transform Tithe House, which housed the former JobCentre, into the arcade, but town councillors say that empty shops on Main Street should be filled first.
Five letters of objections have been submitted to the council, with concerns over the access to the centre being dangerous, competition to other town businesses and the fact that there are empty shop units in Cockermouth.
Cockermouth Civic Trust has also objected to the proposals saying it will be in direct competition with shops on Main Street.
However, John Rockcliffe, Mitchells director and head of its land agency,said that he didn’t see the arcade as competition for the Main Street businesses because they were in a prime location.
“If we get the go-ahead, 30 jobs will be quite a boost for the town,” added Mr Rockcliffe.
Mark Wise, Mitchells director and auctioneer, said it would “help broaden the town centre and bring people up to this end of town and increase the whole retail experience.”
The Tithe House building provided a lifeline for Cockermouth businesses after the November 2009 floods.
It became known as Main Street at Mitchells when local traders took up the company’s invitation to open units there.
In its planning application, Mitchells said it had looked at a number of empty units in Station Street, Main Street, Market Place, Market Street and Castlegate, but none had the floor space required by the company.
It said it wanted a high quality, modern retail facility that would increase consumer choice, improve the range of facilities and bring investment into the town without having a significant adverse impact on trade or turnover in the town.
Mr Rockliffe said the arcade would be aimed at traders wanting small retail units with a short lease, as they could not afford the high prices and longer leases of units elsewhere.
JBarwise@cngroup.co.uk
First published at 11:26, Friday, 08 June 2012
Published by http://www.newsandstar.co.uk
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