US wholesale inventories expected to grow in coming months, supported by strong spending

Economic Indicators Associated Press

The Commerce Department reports on stockpiles held by wholesale businesses in December. The report will be issued Tuesday at 10 a.m. Eastern.

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INVENTORIES AND SALES: Economists believe that sales at the wholesale level fell 0.5 percent in December after a 0.3 percent slip in November, according to a survey of economists by FactSet. Those economists had expended a December decline of 0.4 percent after levels had risen 0.8 percent in November.

Economists have not been too concerned about the weakness in sales, believing that strong employment gains will drive demand in coming months.

JOBS, JOBS, JOBS: Employers added 257,000 jobs in January after gains of 329,000 in December and 423,000 in November. That's the most robust pace for hiring in 17 years. Wages showed a big gain in January and while the unemployment rate rose to 5.7 percent, up from 5.6 percent, the increase occurred for a good reason. More than 700,000 Americans, the most in six years, joined the workforce and began looking for jobs.

Many economists believe that strong hiring, paired with falling gas prices, will spur consumer spending.

Businesses would have to restock their shelves to keep pace.

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Those rising inventories would lead to stronger production from factories and economists say that would energize the overall economy.

GREENER PASTURES: The economic growth rate slowed to 2.6 percent between October and December after a 5 percent surge in the previous quarter. Yet given the sizzling employment gains in recent months, many economists believe growth will improve enough in coming quarters to push activity to above 3 percent for all of 2015. That would be the best performance in a decade.