US wholesalers cut stockpiles, clearing way for new orders

A forklift operator moves a pallet of solar panels at the SolarCity warehouse facility in Cranbury, New Jersey.

Michael Nagle | Bloomberg | Getty Images

U.S. wholesale businesses cut back their stockpiles while sales rose in October. That's a trend that could boost demand for factory goods in the months ahead.

The Commerce Department says that wholesale inventories fell 0.4 percent, the largest drop in eight months. Sales rose 1.4 percent.

Higher sales and a drop in inventories are good signs that consumers and businesses are spending more, and that wholesalers are clearing out a backlog of goods. That suggests they will have to order more goods to meet future demand.

Wholesalers of computer products, pharmaceuticals, and steel and other metals led the cutbacks. Many firms piled up too many goods and have spent much of this year reducing their new orders, which has slowed factory output.