US wholesale stockpiles rise 1.2 percent

Inventories at the wholesale level rose 1.2 percent in January compared with December when inventories had edged up a slight 0.1 percent, the Commerce Department said Friday.

It was the biggest gain since a similar increase in December 2011.

Sales at the wholesale level dropped 0.8 percent after being flat in December.

Sluggish growth in stockpiles was a key reason the economy barely grew in the October-December quarter. But economists believe stronger job growth and other signs of an economic rebound will spur businesses to restock this quarter.

Increased stockpiling supports economic growth by triggering greater factory production.

The economy, as measured by the gross domestic product, grew at a barely discernible 0.1 percent rate in the fourth quarter. But many economists believe faster inventory building in the current quarter will help lift growth to a faster pace of around 2 percent in the January-March period.

In January, the rise in stockpiles was led by a 3.4 percent gain in lumber inventories, a sign that building supply stores are boosting stockpiles in response to the rebound in home construction that has been occurring.