US December wholesale inventories revised slightly higher

[WASHINGTON] US wholesale inventories rose slightly more than initially estimated in December, offering hope that supply chain constraints could be easing.

The Commerce Department said on Wednesday that wholesale inventories increased 2.2 per cent in December, instead of 2.1 per cent as estimated last month. Stocks at wholesalers advanced 1.7 per cent in November.

Economists polled by Reuters had expected inventories would be unrevised. Wholesale inventories jumped 18.5 per cent in December from the year-earlier period.

Inventories are a key part of gross domestic product. The report followed news on Tuesday that goods imports increased to a record high in December.

Strained global supply chains had been making it harder for businesses to replenish depleted inventories. Motor vehicle stocks remain very low because of a global shortage of semiconductors, which is constraining motor vehicle production.

In December, wholesale motor vehicle inventories accelerated 4.6 per cent after rising 3.4 per cent in November.

Wholesale inventories, excluding autos, increased 2.0 per cent in December. This component goes into the calculation of GDP.

Inventory investment surged at a seasonally adjusted annualised rate of US$173.5 billion in the fourth quarter, the second-largest quarterly increase on record.

Most economists see further scope for inventories to rise, noting that inflation-adjusted inventories remain below their pre-pandemic level. Sales-to-inventory ratios are also low.

Inventories contributed 4.90 percentage points to the fourth quarter's 6.9 per cent annualised growth pace. Restocking, after three straight quarters during which inventories were drawn down, is supporting manufacturing.

Sales at wholesalers gained 0.2 per cent in December after rising 1.7 per cent in November. At December's sales pace it would take wholesalers 1.25 months to clear shelves, up from 1.22 months in November. REUTERS