U.S. wholesale inventories were weaker than initially estimated in November amid the largest increase in sales in eight months, suggesting that inventory investment could be a drag on economic growth in the fourth quarter.
The Commerce Department said on Friday that wholesale inventories dipped 0.1% in November instead of being unchanged as previously reported.
Stocks at wholesalers edged up 0.1% in October. They increased 3.3% on a year-on-year basis in November.
The component of wholesale inventories that goes into the calculation of gross domestic product nudged up 0.1% in November.
The pace of inventory accumulation accelerated from the third quarter of 2018 through the first quarter of 2019, before shifting lower in the second and third quarters.
Inventory investment had a neutral effect on GDP growth in the third quarter. The economy grew at a 2.1% annualized rate in the July-September period. Slow inventory accumulation is expected to offset some on the anticipated boost to fourth-quarter GDP growth from a shrinking trade deficit.
Growth estimates for the fourth quarter are as high as a 2.5% rate.
In November, wholesale auto inventories dropped 1.1% after falling 0.5% in the prior month. Apparel inventories slipped 0.4% after declining 1.6% in October. There were decreases in machinery, furniture and computer equipment inventories.
Petroleum inventories increased 0.6% after tumbling 3.5% in October.
Sales at wholesalers rebounded 1.5% in November, the largest increase since March, after falling 0.9% in October. Motor vehicle sales jumped 4.5%. That followed a 2.0% drop in October. Apparel sales edged down 0.1%.
At November’s sales pace it would take wholesalers 1.35 months to clear shelves, the fewest since April and down from 1.37 months in October.
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