Business Briefs March 10, 2011

Wholesale inventories and sales rise in January

WASHINGTON - Businesses at the wholesale level added to their stockpiles in January and their sales jumped by the largest amount in 14 months. But the spike in sales was partially influenced by rising oil prices.

Wholesale inventories rose 1.1 percent in January, the Commerce Department said Wednesday. It was the 12th gain in 13 months.

Sales at the wholesale level rose for the seventh straight month. The 3.4 percent increase was the largest gain since November 2009.

Still, a 10.6 percent rise in demand for petroleum helped drive the jump in sales, reflecting higher oil and gas prices.

The rise in inventories left stockpiles at $436.9 billion. That's 13.1 percent higher than the low reached in September 2009, when companies were slashing their stockpiles to keep costs under control during the recession.

Greater sales should encourage businesses to keep restocking their shelves and drive factory production in the months ahead.

Economists are concerned that rising oil prices could pose a risk to the economy. David Wyss, chief economist at Standard & Poor's in New York, said that oil prices will have a limited effect on economic growth. He said the broad gain in sales and inventories in January suggest the economy could withstand that impact.

Tillerson: Oil prices not yet hurting economy

NEW YORK - Exxon Mobil CEO Rex Tillerson said Wednesday he doesn't think the recent jump in oil prices is hurting the U.S. economy - yet.

At the same time, he acknowledged that gasoline prices are approaching an uncomfortable threshold for American families.

Oil is about $104 per barrel, and the national average for gasoline is now $3.52 per gallon. Drivers on the West Coast are paying close to $4. And the price is expected to rise through spring and into summer.

Tillerson told reporters at the New York Stock Exchange that in 2008 American families appeared to change their driving and spending habits when gasoline hit $4 per gallon that June. Gas peaked at $4.11 in July that year as oil climbed to $147 per barrel.

Tillerson said $4 gas "creates some real challenges" for average American families and their household budgets. When gasoline rises above $4 per gallon, it's a "significant emotional event for a lot of people," he said.

- The Associated Press