Tags: january | wholesale | inventories | revised | down

Wholesale Inventories Revised Down in Hit to Growth

Forklift pallet carries with barrels of stock.
(Fkdkondmi/Dreamstime)

Friday, 06 March 2020 08:30 AM

U.S. wholesale inventories fell more than initially estimated in January amid a surge in sales, suggesting an anticipated boost to economic growth in the first quarter from a shrinking trade deficit was likely to be offset by weak inventories.

The Commerce Department said on Friday that wholesale inventories dropped 0.4% in January instead of falling 0.2% as reported last month. Stocks at wholesalers fell 0.3% in December. They rose 0.4% on a year-on-year basis in January.

The component of wholesale inventories that goes into the calculation of gross domestic product fell 0.4% in January.

The pace of inventory accumulation accelerated from the third quarter of 2018 through the first quarter of 2019, before shifting lower from the second through the fourth quarters. Some of the slowdown in inventory accumulation has been blamed on a strike at General Motors from September to late October.

Inventory investment sliced off almost a full percentage point from GDP growth in the fourth quarter. The economy grew at a 2.1% annualized rate in the October-December period, matching the third quarter's pace.

In another report on Friday, the Commerce Department said the trade deficit dropped 6.7% to $45.3 billion in January as both imports and exports fell.

In January, wholesale auto inventories edged up 0.1% after falling 0.8% in the prior month. Apparel inventories dropped 0.9% after declining 1.2% in December.

Sales at wholesalers rebounded 1.6% in January, the most since March 2019, after falling 0.2% in December. Motor vehicle sales increased 0.3% in January. That followed a 4.2% drop in December. Apparel sales were unchanged in January.

At January's sales pace it would take wholesalers 1.33 months to clear shelves, the fewest since March 2019 and down from 1.36 months in December. 

© 2020 Thomson/Reuters. All rights reserved.


   
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Economy
U.S. wholesale inventories fell more than initially estimated in January amid a surge in sales, suggesting an anticipated boost to economic growth in the first quarter from a shrinking trade deficit was likely to be offset by weak inventories.
january, wholesale, inventories, revised, down
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2020-30-06
Friday, 06 March 2020 08:30 AM
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