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[WASHINGTON] US business inventories were unchanged in January and further declines in sales pushed the number of months it would take to clear shelves to the highest since July 2009, which suggests a stock drawdown in the months ahead.
The Commerce Department said on Thursday business inventories were also unchanged in December after previously being reported to have increased 0.1 per cent.
Economists polled by Reuters had forecast inventories gaining 0.1 per cent in January.
Inventories are a key component of gross domestic product. Retail inventories excluding autos, which go into the calculation of GDP, edged up 0.1 per cent after being flat in December.
That could see economists lower their first-quarter GDP growth estimates. Growth forecasts for the January-March quarter currently range between an annualized pace of 1.7 per cent and 2.5 per cent.
Economic activity early in the year was hurt by a harsh winter and the now-settled labor dispute at the country's West Coast ports, which disrupted the supply chain. The economy grew at a 2.2 per cent pace in the fourth quarter.
In January, business sales fell 2.0 per cent, the biggest decline since March 2009, after falling 1.0 per cent in December.
At January's sales pace, it would take 1.35 months for businesses to clear shelves, the highest inventory-to-sales ratio since July 2009.
The rise in the ratio from 1.33 in December could be a sign that inventories are now probably approaching levels that might make businesses uncomfortable about adding more stocks.
That could mean some cutting back in the months ahead.