US wholesale inventories revised up in November

WASHINGTON: US wholesale inventories were unchanged in November instead of falling as initially estimated, the government said on Friday, supporting expectations that inventory investment was likely the main driver of economic growth in the fourth quarter.

The Commerce Department estimated last month that wholesale inventories dipped 0.1% in November. Stocks at wholesalers surged 1.3% in October. The component of wholesale inventories that goes into the calculation of gross domestic product fell 0.1% in November.

Inventories decreased 2.1% in November from a year earlier.

The economy is expected to have expanded at around a 5% annualized rate in the fourth quarter, with the bulk of the rise in gross domestic product seen coming from inventory investment.

Businesses are replenishing inventories after they were drawn down early in the pandemic. That has helped to underpin manufacturing. Inventory accumulation is expected to blunt some of the drag on GDP from a widening trade deficit, which hit a more than 14-year high in November.

The economy grew at a historic 33.4% pace in the third quarter after shrinking at a 31.4% rate in the April-June period, the deepest since the government started keeping records in 1947. Inventories added to GDP growth in the third quarter after being a drag for five straight quarters.

Wholesale stocks of motor vehicles and parts rebounded 0.8% in November after slipping 0.2% in October.

Sales at wholesalers rose 0.2% in November after accelerating 1.7% in October. At November's sales pace it would take wholesalers 1.31 months to clear shelves, unchanged from October.