A:

Although an investor should be familiar with many important economic indicators, the main indicators that are vital for the wholesale sector are the retail trade sales and food services industry, manufacturing and trade inventory and sales, the consumer price index (CPI) and the real gross domestic product (GDP).

The wholesale sector is comprised of companies that distribute non-durable and durable goods, most typically broken down by product category. The most common types of non-durable goods include products such as groceries, petroleum and drugs. The most common types of durable goods include commercial equipment, motor vehicles, machinery and electrical goods.

The most common companies operating in the wholesale sector are logistics and delivery companies, such as McKesson, Avnet and Sysco. Since many of these companies deliver consumable goods as well as equipment needed for expanding businesses, the wholesale sector is very closely linked to the economy. If the economy is good, consumers increase purchases at retail locations and this increases the need for the wholesale sector. Businesses also expand and need to ship new products and equipment, further adding value to the wholesale sector.

The leading economic indicators that an investor should know about when investing in the wholesale sector are the ones that closely relate to the economy.

The real GDP measures the society's wealth. The CPI measures the prices in the economy. The retail trade sales and food services industry measures personal consumption across retail industries. The manufacturing and trade inventory and sales measures inventory rates and sales of the manufacturing industry. For an investor to feel confident in the wholesale sector, all of these indicators should be high.

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