WASHINGTON, March 11 - U.S. business inventories increased in December as sales recorded their biggest drop in three years, potentially pointing to an unplanned piling up of unsold goods.
The Commerce Department said on Monday that business inventories rose 0.6 percent after being unchanged in November.
Inventories are a key component of gross domestic product. December’s increase was in line with economists’ expectations.
The December business inventory report was delayed by a five-week partial shutdown of the federal government that ended on Jan. 25. The January report, which was scheduled to be published on Thursday, will now be released on April 1.
Retail inventories rebounded 0.9 percent in December as previously reported in an advance report last month. Retail inventories fell 0.4 percent in November.
Motor vehicle inventories rose 0.6 percent rather than the 0.7 percent rise reported last month. That followed a similar gain in November. Retail inventories excluding autos, which go into the calculation of GDP, increased 1.0 percent in December as reported last month.
Wholesale inventories jumped 1.1 percent in December and stocks at manufacturers were unchanged.
The government reported last month that inventory investment added 0.13 percentage point to the fourth quarter’s 2.6 percent annualized growth rate. December trade and construction spending data have led economists to expect that the government will lower the fourth-quarter GDP estimate when it publishes revisions to the data later this month.
Business sales tumbled 1.0 percent in December, the most since December 2015, after dropping 0.6 percent in November. Retail sales plunged 1.8 percent in December. Sales at wholesalers dropped 1.0 percent while those at manufacturers fell 0.2 percent.
At December’s sales pace, it would take 1.38 months for businesses to clear shelves, the most since August 2017, up from 1.36 months in November.
Reporting by Lucia Mutikani; Editing by Andrea Ricci