Wholesale inventories increased by a sharp 0.6% in April. This report had a very long look-back, but the reality is that it could skew early estimates for the gross domestic product reading for the second quarter.

That may sound good, but there are two ways this report can be taken. April was a time when many of those retail sales were starting to disappoint. It could be one of those instances in which a higher number isn’t good — or at least is not a gain for the right reasons. Still, sales in the wholesale sector rose a very strong 1.0%, which might indicate a leaner level of inventories. The stock-to-sales ratio fell marginally to 1.35 in April from 1.36 in March.

Bloomberg was expecting inventories to be up 0.1%. Its Econoday range was −0.1% to a gain of 0.3%, so this was above and beyond the gains expected by every single economist that was polled. Reuters was also calling for a 0.1% gain.

A revision was seen for March, taking inventories up to 0.2% from the previous 0.1% gain for the month.

Auto sales were strong on the wholesale sector during April. This was up 1.6% and accounted for a 0.4% decrease in inventories, which will have to be made up with more orders ahead.

This report is one of the positive surprises at a time when more economic weakness has been seen than strength. Still, we cannot get too gung ho about monitoring economic reports from April.

It still appears as though a no-hike announcement is coming on next week’s Federal Open Market Committee (FOMC) decision on interest rates. Now the question moves to “when,” even if some investors and economic watchers think it may now be “if” rates get raised.

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