HomeEconomic IndicatorWholesale inventories in the US show improvement in December, according to Reuters.

Wholesale inventories in the US show improvement in December, according to Reuters.

US Wholesale Inventories Rebound in December

Boosted by Motor Vehicle Stocks

U.S. wholesale inventories rebounded in December, as confirmed by the government on Thursday. The surge in motor vehicle stocks played a significant role in this positive development.

Commerce Department’s Census Bureau Report

The Commerce Department’s Census Bureau reported that wholesale inventories increased by 0.4% in December, in line with last month’s estimations. This rise comes after a 0.4% decline in November. Economists polled by Reuters had anticipated no revisions to the inventory figures.

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Impact on Gross Domestic Product

Wholesale inventories play a crucial role in the calculation of the gross domestic product (GDP). In December, they witnessed a 2.7% year-on-year decline. Private inventory investment contributed 0.1 percentage point to the economy’s 3.3% annualized growth pace in the fourth quarter, following a substantial boost in the July-September quarter.

  • Stocks of furniture, apparel, and petroleum declined.
  • Automotive inventories surged by 2.9% in December.
  • Wholesale stocks of professional and computer equipment, machinery, paper, and medication also increased.

Excluding Automotive Impact

Excluding autos, wholesale inventories edged up by 0.1% in December. This component is crucial in the GDP calculation.

Rise in Wholesale Sales

Wholesale sales experienced a 0.7% rise in December, following a 0.1% dip in November. At the current sales pace, it would take wholesalers 1.34 months to clear shelves, unchanged from November.

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Overall, the positive movement in wholesale inventories and sales in December reflects a potential recovery in the U.S. economy.

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