Wholesale trade was up for April, according to a Commerce Department report (link opens a PDF) released today. After increasing 1.6% for March, wholesales sales increased a seasonally adjusted 1.3% to $418 billion for April.
While wholesale trade is used as an indicator of economic strength, investors pay close attention to durable goods as a potential sign of more sustainable confidence (or lack of confidence). For April, wholesale durable goods sales proved to be an especially strong point, rising 1.7% month over month. The gains were widespread across various industries, including improvements for automotive (+2.9%), professional equipment (+2.4%), and electrical (+2.3%) industries.
Wholesale nondurable goods sales edged up 1% due primarily to a 3.1% jump in medical drugs sales.
Investors also keep a close eye on wholesale inventories as increases could be a sign that businesses expect demand to pick up in the near future. For April, overall inventories increased 1.1% on top of March's 1.1% expansion. This time, however, durable goods trailed general numbers, with inventories up just 0.9%.
To understand the rate at which goods are being made and sold, economists compute an inventories/sales ratio. Since sales and inventories both increased relatively similar amounts from March to April, the inventories/sales ratio stayed steady at 1.18, just 0.01 points above the April 2013 ratio.
Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.