The Commerce Department said wholesale inventories dropped 0.4% as previously reported last month. Stocks at wholesalers gained 0.1% in December. Economists polled by Reuters had expected that inventories would be unrevised. Inventories are a key part gross domestic product.
They increased 15.8% in January on a year-on-year basis. Inventory accumulation surged in the fourth quarter, mostly reflecting an unwanted piling up of goods, as growth in consumer spending decelerated because of higher interest rates.
Inventories accounted for half of the 2.7% annualized growth in GDP last quarter, and a liquidation of these unsold goods could contribute to tipping the economy into an anticipated recession this year. Wholesale motor vehicle inventories fell 0.5% after increasing 1.8% in December. Excluding autos, wholesale inventories also fell 0.4% in January. This component goes into the calculation of GDP. Sales at wholesalers increased 1.0% in January after slipping 0.2% in December. At January's sales pace it would take wholesalers 1.34 months to clear shelves, down from 1.36 months in December. (Reporting by Lucia Mutikani)
