US business inventories unexpectedly fall in October
Reuters
Published Dec 14, 2023 10:32AM ET
Updated Dec 14, 2023 11:02AM ET
WASHINGTON (Reuters) - U.S. business inventories unexpectedly fell in October, suggesting that inventory investment could weigh on economic growth this quarter.
Business inventories dipped 0.1%, the first decline since June, after increasing 0.2% in September, the Commerce Department's Census Bureau said on Thursday.
Economists had expected that inventories, a key component of gross domestic product, would be unchanged. Inventories increased 0.6% on a year-on-year basis in October.
Business inventories are expected to subtract from gross domestic product in the fourth quarter. Private inventory investment contributed 1.40 percentage points to the economy's 5.2% annualized growth pace in the third quarter. Growth estimates for the October-December quarter are below a 2% rate.
A survey from the Institute for Supply Management this month found that customer inventories had increased "toward the upper end of 'about right' territory" in November, suggesting limited scope for businesses to restock at the third quarter's clip. Higher interest rates are tamping down demand.
Retail inventories slipped 0.1% in October, instead of being unchanged as estimated in an advance report published last month. They rose 0.4% in September.
Motor vehicle inventories increased 1.9%, rather than 2.0% as estimated last month. They rose 2.3% in September.
Retail inventories excluding autos, which go into the calculation of GDP, fell by an unrevised 0.9%. They decreased 0.4% in September. Wholesale inventories dropped 0.4%, while stocks at manufacturers gained 0.1%.
Business sales fell 1.0% in October after rising 0.9% in September. At October's sales pace, it would take 1.37 months for businesses to clear shelves, up from 1.36 months in September.
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Written By: Reuters
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