WASHINGTON Dec 9 U.S. wholesale inventories
fell as previously reported in October amid a surge in sales,
supporting views that inventory investment would provide a
modest boost to economic growth in the fourth quarter.
The Commerce Department said on Friday that wholesale
inventories decreased 0.4 percent after rising 0.1 percent in
September. The department reported last month that wholesale
inventories declined 0.4 percent in October.
The component of wholesale inventories that goes into the
calculation of GDP - wholesale stocks excluding autos - also
fell 0.4 percent in October.
Inventory investment contributed half a percentage point to
the economy's 3.2 percent annualized growth rate in the third
quarter. Inventories had weighed on GDP growth since the second
quarter of 2015.
With a report this week showing stocks at manufacturers were
unchanged in October, economists believe inventories'
contribution to growth in the fourth quarter will be modest.
Still, strong consumer demand, against the backdrop of a
labor market that is near full employment, should keep the
economy on solid ground. The Atlanta Federal Reserve is
forecasting GDP rising at a 2.6 percent pace this quarter.
In October, wholesale stocks of farm products increased 2.0
percent after rising 3.9 percent in September. Wholesale
inventories of petroleum rose 1.9 percent, while automobile
stocks gained 0.3 percent. Machinery inventories tumbled 1.0
percent in October.
Sales at wholesalers jumped 1.4 percent in October after
rising 0.4 percent in September. Sales were buoyed by a 1.1
percent increase in sales of machinery as well as a 6.6 percent
jump in petroleum.
At October's sales pace it would take wholesalers 1.30
months to clear shelves, down from 1.32 months in September.
While that ratio has declined from the 1.37 months touched
in January, which was the highest since March 2009, it remains
relatively high. That suggests the wholesale inventory drawdown
could continue for a while.
(Reporting by Lucia Mutikani; Editing by Paul Simao)