WASHINGTON, Feb 10(Reuters) – U.S. business inventories increased less than expected in November as stocks at retailers fell, government data showed on Tuesday.
Inventories rose 0.1% after gaining 0.2% in October, the Commerce Department’s Census Bureau said on Tuesday. Inventories are a key component of GDP and one of the most volatile.
Economists polled by Reuters had forecast inventories gaining 0.2%. They increased 1.2% on a year-over-year basis in November. The report was delayed by last year’s shutdown of federal government.
Retail inventories slipped 0.1% in November after rising 0.5% in October. Motor vehicle inventories fell 0.9%. That followed a 1.0% increase in October.
Retail inventories excluding autos, which go into the calculation of GDP, rose 0.2% after a similar gain in the prior month. Wholesale inventories increased 0.2% in November while stocks at manufacturers edged up 0.1%.
Business inventories have declined for two straight quarters, subtracting from GDP growth. The drag was, however, more than offset by a shrinking trade deficit during that period. The Atlanta Federal Reserve is currently forecasting GDP will increase at a 4.2% annualized rate in the fourth quarter. The economy grew at a 4.4% pace in the July-September quarter.
Business sales increased 0.6% in November after declining 0.2% in October. Sales at retailers increased 0.5%. At November’s sales pace, it would take 1.37 months for businesses to clear shelves, down from 1.38 months in October.
(Reporting by Lucia Mutikani; Editing by Chizu Nomiyama )
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