U.S. business inventories increased solidly in December, with stocks at retailers larger than initially estimated.
Business inventories rose 0.6% in December after gaining 0.5% in November, the Commerce Department said on Wednesday. Inventories are a key component of gross domestic product.
Economists poll had forecast inventories rising 0.5% in December. Inventories fell 2.6% on a year-on-year basis in December.
Retail inventories increased 1.2% in December, instead of 1.0% as estimated in an advance report published last month. That followed a 0.7% rise in November. Motor vehicle inventories increased 1.1%, rather than 0.9% as previously reported.
Retail inventories excluding autos, which go into the calculation of GDP, gained 1.2%, instead of 1.1% as estimated last month.
The economy grew at a 4.0% annualized rate in the fourth quarter after a historic 33.4% growth pace in the third quarter. Inventories contributed to GDP growth for two straight quarters.
Businesses are replenishing inventories after they were drawn down early in the pandemic. That has helped to underpin manufacturing, offsetting slowing consumer spending.
Wholesale inventories rose 0.3% in December. Stocks at manufacturers also gained 0.3%.
Business sales jumped 0.8% in December after being unchanged in November. At December’s sales pace, it would take 1.32 months for businesses to clear shelves, unchanged from November.