In the first draw since early on in the pandemic 2-1/2 years ago, wholesale inventories fell a provisional 0.4 percent in January. The draw follows a marginal 0.1 percent build in December and reflects a second straight 0.8 percent draw for nondurable goods which are sensitive to price changes (this series tracks dollar values, not volumes). But wholesale inventories of durable goods also fell in the month, though only 0.1 percent following a 0.6 percent build in December. Still the wholesale sector is getting the inventory contribution to first-quarter GDP off to a slow start.

Wholesale inventories are expected to hold unchanged in the advance report for January that would follow a marginal 0.1 percent build in December.

Wholesale inventories measure the monthly dollar value of inventories held by merchant wholesalers and are tracked to gauge inventory change in quarterly GDP. The advance report is released late in the month for the following month and is part of the Monthly Advance Economic Indicators report (which also includes data on retail inventories and international trade in goods). Final monthly data for wholesale inventories are released about two weeks later with the Wholesale Trade report which also includes initial monthly data on wholesale sales.

Investors need to monitor the economy closely because it usually dictates how various types of investments will perform. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers a slower rate of growth that won't lead to inflationary pressures. Wholesale inventory data give investors a chance to look below the surface of the visible economy, especially for unwanted build. If inventories are growing too fast relative to economic growth, then both production and employment will probably have to slow while those inventories are worked down.