The Commerce Department said total January wholesale inventories dropped 0.7% compared to a revised 1.5% fall in December, previously reported as a 1.4% decline.
Inventories were depressed by record drops of 4.8% in autos and 3.5% in furniture as companies sharply cut back output to deal with slackening demand as the economy battles a 14-month recession.
0:00/1:46Auto sales continue to slideCompared to the same period a year ago, inventories rose 1%.
Economists polled by Reuters had expected a 1% drop in January from December. Sales fell 2.9% in January after falling by a revised 3.7% the previous month. December sales were previously reported as 3.6% lower.
Overall sales were dragged down by a record 6.5% dive in durable goods sales.
Household incomes have been pinched by a combination of rising unemployment and plummeting asset values, causing consumers to shun big-ticket items. The unemployment rate rose to 8.1% in February, the highest level in a quarter of a century.
Falling sales lifted the inventory-to-sales ratio, a measure of how long it would take to sell stocks at the current sales pace, to 1.3 months' worth - the highest since a matching reading in January 2002 - from December's 1.27 months.
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