U.S. business inventories fall for first time in nearly two years
Reuters
Published Mar 15, 2023 10:38AM ET
WASHINGTON (Reuters) - U.S. business inventories fell for the first time in nearly two years in January, potentially setting up inventory investment to be a drag on economic growth in the first quarter.
Business inventories dropped 0.1%, the Commerce Department said on Wednesday. That was the first decline and also the weakest reading since April 2021 and followed a 0.3% gain in December. Economists polled by Reuters had expected inventories, a key component of gross domestic product, would be unchanged.
Inventories increased 11.1% on a year-on-year basis in January. Inventory accumulation surged in the fourth quarter, mostly reflecting an unwanted piling up of goods, as growth in consumer spending decelerated because of higher interest rates.
Retail inventories increased 0.2% instead of 0.3% as estimated in an advance report published last month. They rose 0.4% in December.
Motor vehicle inventories advanced 0.6% as estimated last month. They increased 1.4% in December. Retail inventories excluding autos, which go into the calculation of GDP, gained 0.1% instead of the 0.2% rise estimated last month.
Inventories accounted for half of the 2.7% annualized growth rate in GDP last quarter. Analysts say a liquidation of these unsold goods could contribute to tipping the economy into an anticipated recession this year.
Wholesale inventories fell 0.4% in January. Stocks at manufacturers were unchanged.
Business sales rebounded 1.5% in January after falling 0.6% in December. At January's sales pace, it would take 1.34 months for businesses to clear shelves, down from 1.36 months in December.
Get The News You Want
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.